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21 March, 2017
NAKO calls for reduced classification of defence information, and transparency on defence procurement and Ukroboronprom

The Independent Defence Anti-Corruption Committee (NAKO) announced its strategy on Tuesday, identifying the main problem areas as corruption in unnecessary secrecy of defence information, defence procurement, and weak governance of the state-owned defence industry. It called on the government to prioritize reducing classified information in the defence sphere, increasing transparency and oversight of acquisition planning and procurement, and to uphold OECD standards on good governance reform in UOP, as part of a series of recommendations on increasing transparency and accountability of the defence sector.

“Secrecy doesn’t secure national interest – in fact, it increases the risk of corruption, which weakens the defence forces and threatens the safety of our state and empowers our enemies,” said Oleh Rybachuk, co-chair of the committee. NAKO called on the security services to publish and initiate changes in how information is classified, and encouraged the Rada and relevant state bodies to collaborate with civil society to review today’s legislation, which preferences secrecy over transparency and lacks efficient oversight. The committee also made recommendations on improved governance of Ukroboronprom (UOP), emphasizing that the government should require that UOP adhere to the OECD Guidelines on Corporate Governance of State-Owned Enterprises. These include a level playing field and fair competition; adherence to best practice in accounting, financial disclosure, compliance and auditing; and accountability of the board. The committee will monitor whether the selection process for an external consultant on corporatization of UOP is transparent and follows international good practice. It also aims to assist UOP by involving external expertise to implement the OECD good governance principles. Ukraine was ranked in band D of the TI Government Defence Anti-Corruption Index, which measures the risk of corruption in national establishments worldwide (ratings from A to F).  The committee stated that in order to see significant change, political will – in addition to technical reforms – is required.

“Without genuine political will to fight defence corruption, the security of Ukraine will continue to be seriously undermined, and soldiers fighting on the front will suffer from the lack of equipment and supplies they need,” said Tim Evans, Committee member and former commander of the NATO Allied Rapid Reaction Corps. In the past five months, the committee has worked on three main issues: corruption risk in the provision of security assistance, medical supply, and housing for defence personnel. Security assistance is a significant portion of the budget: in 2016, the Ukrainian military budget was $4.5bn, and 7% of this amount, for example, was provided by US security assistance. Initial research identified shortcomings in training, maintenance and spare parts, and that assistance sometimes doesn’t align with operational needs; it also identified corruption risk in the form of misappropriation and diversion.

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