Ukraine’s Anti-corruption Theory of Change. Lessons Learned and Way Forward

On November 29, 2021 AntAC held a public event dedicated to assessing the achievements of Ukraine’s anti-corruption fight and to discuss the plans for the next five years. The full video of the event is available here.

AntAC Board Member Olena Halushka presented a memo “Ukraine’s anti-corruption theory of change”. It is a summary from the reform insiders’ view of Ukraine’s experience in fighting against corruption. It is a collection of practical ideas, which might be useful to leaders from transitional democracies who need to prepare for a window of opportunity in their homes, or international partners for planning their activities in other countries, which face similar challenges as Ukraine. 

The memo explains three pillars of Ukraine’s anti-corruption theory of change:  drivers of the reform, which include the civil society organizations, investigative journalists and international partners, and two areas of the reform: overwhelming transparency, which lies a basis for corruption prevention, and an effective system for criminal justice. Full text of the memo is available here. 

The presentation was followed by three panel discussions. 

Member of Parliament Yaroslav Yurchyshyn set the scene of the first discussion about the next five years of the anti-corruption reform. He stressed the importance to further strengthen institutionally newly built agencies. “We should also send reform impulse to other areas, like holistic judicial reform and the reform of the Security Service of Ukraine,” said Yurchyshyn. He also highlighted the urgent need to fight against oligarchs, but existing mechanisms, like the Anti-Monopoly Committee of Ukraine or national regulators in the spheres of energy and media are not efficient and should therefore be reformed.

Artem Romaniukov, co-founder of the SaveDnipro initiative, and Oleksandra Hubytska, editor of Nashi Groshi.Lviv, shared the perspective of local reform actors. Both of them highlighted that opening up state-run information provides activists and journalists with powerful tools of monitoring and oversight, but state controlling agencies, like the State Audit System which has to oversee the sphere of public procurements, do not properly do their job. They also emphasized that decentralization brought a lot of funds and benefits to the local communities, which caused decentralization of corruption too. This makes the need to nurture and invest in local reform actors and watchdogs a top priority. 

Romaniukov, whose CSO works in the area of environmental protection, reminded that though in 2017 a progressive law on environmental impact assessment was adopted, the State Environmental Inspection remains corrupt and blocks its effective implementation. 

Hubytska stressed that as most top media are owned by oligarchs, independent investigative journalism is instrumental and should be supported even more.

Frank Paul, team leader at the Support Group for Ukraine at the European Commission, said that for the effective fight against corruption there must be inevitability of punishment with no exceptions. Among further reform priorities he named criminalization of smuggling and implementation of the administrative procedure reform. “We also have to strengthen the competition and controlling system to reduce oligarchic influence in concentrated markets,” added Paul. He also noted that the support for the civil society and independent media should be upscaled. 

Answering the question of how local reform actors can be better supported, Romaniukov raised the need of most experienced CSOs to mentor and share their knowledge, expertise and advocacy, communications skills with the newly established and local partners. Hubytska said that in the regions where Nashi Groshi did not have local editorial teams, they hired individual journalists and trained them. Such mentorship was done systematically over some period of time. According to Hubytska, this had a much larger impact compared to sporadic cooperation which they had also tried. 

Yurchyshyn stressed that imposing personal Western sanctions against corrupt officials could be helpful to sustain reforms momentum as their money park in the financial systems of developed countries. As an example he recalled sanctions against oligarch Kolomoiskyi the U.S. introduced earlier this year. 

Digitalization blitz-talk with Mykhailo Fedorov, Deputy Prime Minister, Minister of Digital Transformation of Ukraine followed. Minister Fedorov explained that since its launch in 2019, the Ministry has been actively fighting against corruption. Digitalization became a key tool to seize corruption schemes worth millions of hryvnias. “Potential economic effect of digitalization of 17 public services in seven areas is estimated to 495 million hryvnias annually. Meanwhile, annual potential anti-corruption impact caused by closing the loopholes for bribery is 841 million hryvnias per year,” said Minister Fedorov. 

Since 2019, significant progress has been achieved in digitalization of the construction sphere too. The services related to private construction projects went online. Previously, the registry of the State Architectural and Construction Inspection was controlled by outsiders from abroad and was a source for corruption abuses. Ukrainians were forced to pay big bribes to add data to the registry. “We built a new construction registry owned fully by the state. Also, we launched a Single state electronic system in the construction sphere. It saves 3 billion hryvnias annually,” said the Minister. 

The Ministry’s team scrutinizes procurements of soft- and hardware conducted by other public agencies and stops overestimated proposals or attempts to purchase unnecessary or irrelevant products. Over two years, this activity helped to save 6 billion hryvnias of budget funds.

The Ministry is introducing digitalization in all spheres of public life. Thanks to having Chief Digital Transformation Officers in all ministries, 94 projects and more than 300 sub projects of digital transformation in different areas have so far been developed (e.g. e-school, e-ecocontrol etc). They are published on the dashboard: https://plan2.diia.gov.ua.

Till 2024, the goals of the Ministry of Digital Transformation are:

  • 100% of public services are online; 
  • 95% of population has access to internet;
  • 6 million Ukrainians were taught digital literacy; 
  • share of the IT sector in the GDP increased to 10%. 

For more information see the presentation.

The panel discussion on Deoligarchisation of economy, politics, and media started with Minister of Justice of Ukraine Denys Maliuska’s intervention.  Answering the question how he sees the implications of the deoligarchization law in one year, he stressed that expected results are that there will be no oligarchs in Ukraine, while big businesses will not interfere with politics and will not earn from the state budget, while existing monopolies should not abuse the law. It is for the first time ever that the law gives a legal definition to an oligarch, the Minister said. 

The head of NABU department of detectives Andriy Kaluzhynskyi informed that the Bureau is investigating cases related to oligarchs, e.g. the case of Zaporizhzhia Titanium-magnesium Plant (related to oligarch Firtash, as moderator Daria Kaleniuk explained)), Privatbank (to Kolomoiskyi), “Rotterdam plus” (to Akhmetov), Samara oil pipeline (to Medvedchuk), “Bohdan” automobile corporation (to Poroshenko) etc. Some of these cases were transferred to courts, in some the criminal charges were announced. “However, it is not always possible to prove the direct engagement of oligarchs in the schemes,” said Kaluzhynskyi. Apart from bringing guilty to liability, NABU also arrests the assets and could confiscate them upon the court decision. Before the Constitutional Court decision they also had the authority to challenge and cancel commercial agreements in the court.

Agiya Zagrebelska, Head of the Antitrust League NGO stressed that the Anti-Monopoly Committee of Ukraine should become a key body to deal with demonopolization and deoligarchization. It needs reforming. “Today, around 90% of AMCU decisions regarding big businesses are cancelled in the courts. Moreover, administrative courts recently prohibited AMCU to use in their investigations the evidence collected by NABU. This was done in the case of one of the candidates to be named oligarch,” informed Zagrebelska. 

In particular, AMCU needs proper independence from political influence, safeguards for transparent competitive selection of AMCU leadership and against their political dismissals, as well as secured and increased funding, strengthening its investigative powers, and establishment of special court chambers to consider AMCU cases. 

Eka Tkeshelashvili, Chief of Party at the USAID SACCI program expressed confidence that “Ukraine will be successful in bringing up the system that is fair and just and provides a fair playfield for everyone irrespective who you are as individual or how big you are as a business or how influential you could be on the market or on the political life – the same rules that apply to everyone.” To implement deoligarchisation reform, further steps need to follow for that fight to be meaningful, in particular within different other sectors like energy or media. The anti-corruption strategy, which awaits for the second reading, provides good guidance on how different anti-corruption measures can amplify reforms in various sectors to promote openness of the market and fair play.

She stressed that though at times it is taken for granted that in Ukraine civil society is very strong and vibrant, the sustainability of supporting them is very important so that civil society can continue doing their job, provide constant watchdogging, help and guidance.

Minister Maliuska confirmed that AMCU reform is among top priorities. Zagrebelska mentioned that existing draft laws, which were developed by the AMCU do not resolve key issues like the introduction of the competitive selection of the AMCU leadership and safeguarding from political dismissals, or ensuring independence of the agency from the Cabinet of Ministers. 

Tkeshelashvili highlighted that for the society to support reforms, it is necessary to raise their awareness creatively, by a combination of both positive stories and critical as well, shedding the light on the way forward. Therefore, it is critically important to explain what impact deoligarchisation or any other reform will have on everyday life of Ukrainians, for example their bills for electricity and heating, freedom of entrepreneurial activities etc. “This should be a novel element of reform communication to supplement what is considered classical approaches,” added Tkeshelashvili. 

By commenting on the experience of Nashi Groshi, voiced during the previous panel, she stressed that investigative journalism is a very significant component of the reforms communication. Synergetic cooperation between them, CSOs and experts in the field will eventually not only bring capacity development of local journalists, but will also amplify their voices. International partners need to support this even more

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