VIII. CODES OF ETHICS IN THE MEMBER STATES AND THE
3. Compliance-based ethics regimes and integrity-based ethics regimes –
If the discussion on common codes is questionable, what else could be recommended as good international practice? In the previous chapter we discussed the difficulties involved
and approaches. As we will see, it is much easier to define model concepts than model codes.
In the international literature, a "classical distinction" proposed by the OECD in the mid-90s serves as a widely accepted model for the different approaches to ethics. According to this approach the Member States may be classified according to:
a) compliance-based ethics regimes (law), and b) integrity-based ethics regimes (code of ethics)
For example, countries like the United Kingdom and Germany differ widely as to their approaches to ethics. Germany has a highly professionalised public service and clear and detailed regulations against all instances of corrupt behaviour such as bribery, fraud, corruption and conflicts of interest. “In Germany, to start with, the mere notion of 'ethics' is still quite unusual: Instances of ethical or unethical behaviour are thought of rather in terms of “legal” or “illegal” behaviour. Ethics measures are mostly found to be laws proscribing certain types of behaviour, establishing control mechanisms and stating sanctions in case of violations. They are embedded in the tradition and strong systematic of the German legal system. This means that usually they form paragraphs or articles of particular law books such as the criminal law or the public service law. Consequently they can be changed or adapted only through a formal process of legislation passed by Parliament. The rules are stated in a very parsimonious manner, expressing nothing more than the dry judicial facts. This prevalent type of ethics measures is called by the OECD
“Compliance-based ethics management” (OECD, 2000, 25).143 The OECD calls this the
“low road” approach: setting minimum standards beyond which behavior should not fall.
The emphasis is on policing actions and catching wrongdoing, reinforcing the tendency to manage by rules because they provide a base-line for identifying error.144
Whereas the compliance-based approach is more based on rules and enforcement, the integrity-based approach focuses on soft-instruments and codes. Elements of an
“Integrity-based ethics management are codes of ethics, a central ethics coordination body, ombudsmen or procedural arrangements, which aim at avoiding unethical behavior by raising awareness and enhancing the sensitivity for delicate situations, are only rarely found in Germany.”
The integrity-based approach is more focused on results and less on legislation and legal control mechanisms by the Courts. “While there are clear rules against illegal behavior, and sanctions applied when those are breached, the focus is the actions or effects that should be achieved, rather than the behaviour that should be avoided. This suggests an emphasis on:
– the definition of overall aspirational “values” for the public sector (the OECD calls this the “high road”)
143 N. Behncke, Monitoring public administrators or signalling trustworthiness to the demos? The two functions of ethics regulations, in: Polis, No. 61, 2004, University of Hagen, p.3.
144 State Service Commission New Zealand, An Ethics Framework for the State Sector, Occasional Papers, Wellington, No 15, p.11.
– what is achieved rather than how it was achieved (that is, a focus on ends rather than means), and
– Encouraging good behaviour rather than policing errors and punishing bad behaviour
As this study will show (too) many countries do not fit into either of the two scenarios.
Also our case “Germany” provides for more and more elements of a compliance based and an integrity based model.
Also both approaches can include either detailed or general, bureaucratic or flexible,
“tough” or “loose” requirements as to the management of conflicts of regimes. For example, France as a representative of a country with a compliance based approach does not regulate almost 40% of all analysed categories of conflicts of interest. Also Germany has a relatively high record of conflicts of interest which are not regulated at all. Contrary to this, the regulation density in an integrity-based system (like the United Kingdom) can be higher than in a compliance based-system. Also the Netherlands, as a country with an integrity based approach, also has an equally high number of issues that are not regulated as Germany. The main difference between both countries is that Germany regulates mainly by way of laws and codes whereas the Netherlands focus on codes.
These examples show that comparisons between compliance-based countries and integrity-based countries are problematic and may lead to simplistic conclusions.
Although the authors of this study find it useful to offer generalised typologies we were not convinced that this classification offered by the OECD is the most accurate way to describe the reality. For example, whereas the OECD model suggests that compliance-based countries face more enforcement challenges we believe that this can be also the case in integrity-based countries.
Today, most countries seem to fall into a spectrum that combines self-management and self-regulatory practices, independent and external monitoring practices – and legal approaches (including stricter sanctions for non-compliance.)145 During the last 10 years, there has been growing evidence that countries are working to strengthen their legal systems (more regulations) and at the same time introducing more codes of conduct as well. This has been the general trend throughout Europe. For example, Finland has traditionally relied on legal instruments but during the last ten years they have introduced a number of soft instruments such as values statements and codes of conduct. Thus, these regimes are not necessarily mutually exclusive. Therefore, if a country wants to foster good behaviour, basic legal norms and top approaches are needed. These rules can be set
Pure forms of either of these models do not exist and – consequently – cannot be recommended to the EU institutions. Instead other models should be explored.146
4. “Strict”, “moderate” and “soft” conflicts of interest regimes and models
Despite all existing differences and complexities in this study, we believe that it is possible to identify a number of CoI models and to classify a number of national systems in these models. We call these different models conflicts of interest regimes. For example, the USA have a very strict ethics regime which includes a high regulatory density, the existence of a detailed number of restrictions and prohibitions, broad requirements as to register and disclosure requirements, strict post-employment rules, relatively powerful and independent ethics committees etc. In contrast to this Sweden has a relatively low degree of regulation density, only few restrictions and prohibitions, voluntary disclosure policies and no external ethics committees. In our study we call the US model the “tough” conflicts of interest regime and the Swedish model the “soft”
conflicts of interest regime.
In our study we have classified most Member States into three different categories of conflicts of interest regimes. We believe that this prescriptive model can also be very helpful for the different EU institutions when thinking about possible future reforms.
Despite the existing difficulties in defining role models or best practices in the field of conflicts of interest concepts and (even more) for codes of ethics it is possible to classify the different conflicts of interest regimes into three categories. Here, we distinguish between those countries and institutions
– who regulate, prohibit and restrict a number of issues, require a detailed number of reporting obligations and have independent control and monitoring mechanisms in place – Model 1: restrictive approach
– who regulate, prohibit and restrict a number of issues but leave room for some exceptions and have less strict control mechanisms in place – Model 2: moderate approach
– who are mostly based on voluntary approaches and rely on different forms of self-regulation and self-enforcement – Model 3: soft approach
146 For example, Maesschalck has elaborated an interesting classification by adopting the grid-group theory. See J.
Maesschalck, Approaches to Ethics Management in the Public Sector, Public Integrity, Winter 2004/2005, Vol.7, 2005, pp.21.
MODEL 1 – RESTRICTIVE APPROACH
Rules and standards Content, restrictions and requirements Rules, standards and general ethical
principles
Existence of general and specific rules and standards applicable to all institutions High degree of regulation (high number of prohibitions, restrictions etc.)
Financial declaration and register of interests
Financial declarations and register of interests
Obligatory reporting Annual reporting Obligatory updating
Detailed requirements (few exceptions) Information on spouse’s activities required Public access to register
Monitoring of register by public and by internal or external control mechanisms (e.g. ethics commission)
Sanctions for non-compliance Ethics committee Mostly no self-regulation
Inter-institutional and/or sectoral committee
Guaranteed resources Advisory role
Training role Own inquiry rights
Monitoring and sanctioning powers Independent composition
Post-employment rules Prohibition to exercise activities after leaving the position which are related to the former functions
Cooling-off period
Professional activities General restrictions on additional activities (except legislators)
Model 2 – MODERATE APPROACH
Rules and standards Content, restrictions and requirements Rules, standards and general ethical
principles
Some specific standards for individual institutions
High number of regulations (prohibitions, restrictions etc.) as to different conflicts of interests
Financial declarations and registers of interests
Some financial declarations and registers of interest
Obligatory reporting Annual reporting Obligatory updating
Detailed disclosure requirements that allow for exceptions (e.g. for self-employed persons, money thresholds etc.).
Few requirements on spouse’s activities Public access (internal and/or external) Monitoring by public and internal control mechanisms (mostly by internal offices or by the president)
Sanctions available but not used in practice
Ethics committee Mostly self-regulation
Mostly internal office/commission Limited or no resources
Mostly advisory role No own inquiry rights
No monitoring and sanctioning powers Composed of nominated/elected experts from own institution or outside
Post-employment rules No rules or notification duties when taking up a new position
No cooling-off period
Professional activities Exceptions, legislators are allowed to exercise additional activities
Model 3 – SOFT APPROCH
Rules and standards Content, restrictions and requirements Rules, standards and general ethical
principles
Some specific standards for individual institutions
Moderate number of restrictions and prohibitions
Financial declarations and register interests
Some financial declarations and existence of registers
Voluntary and/or confidential reporting Voluntary annual reporting
Optional updating
Disclosure requirements that allow for exceptions (e.g. for self-employed persons, money thresholds etc.)
No requirements on spouse’s activities Public access (internal and/or external) or restricted access
No monitoring by public and internal control mechanisms (mostly internal offices or president)
Sanctions available but not used in practice Ethics committee Self-regulation (if existing)
No committee
Post-employment rules No rules
Professional activities Exceptions, legislators are allowed to exercise additional activities
It is difficult to classify the EU Institutions in one of these models. Apart from the relevant treaty provisions the European institutions are mostly regulated by codes of ethics. The strictest regime applies to the European Commission, although the European Commission has only established an ethics committee with very restricted tasks and competences. Consequently, the European Commission should be classified between
classified according to the model III, the European Court of Justice would not fit in any of these models. The other EU institutions would probably fit best into model II although the EIB has a more developed ethic regime than the ECB.
Most important standards and instruments in the EU institutions Rules and standards EU institutions
Rules, standards and codes General rules and standards as regulated in the ECT Additional specific codes for
COM, ECB, EIB and Court of Auditors
Parliament has no code but Rules of Procedures (Annex I)
ECJ (none)
Register of interest All institutions except for the ECJ Register requirements Detailed in COM, EIB,
Rules allow for flexibility in CoA, EP and ECB, No regulation of spouses in EP and ECB, No register in ECJ
Monitoring of register Generally public access to registers - not in ECB, in ECA only if College of Members approve
General monitoring responsibility by president of the institution
Quaestors monitor in EP
Sanctions may be decided by the ECJ or internally No register in ECJ
Post-employment EC – Rules on information on activities after hafting left the Commission (one-year period)
EIB – Rules on post-employment (six-month period) No or only general rules in other institutions (e.g. Art.
4 of Statute of the ECJ states: “When taking up their duties, they [the Judges] also give solemn undertaking that, both during and after their term of office, they will respect the obligation arising therefrom, in particular the duty to behave with integrity and discretion as regards the acceptance, after they have cease to hold office, of certain appointments or benefits.
Ethics committee None of the institutions have an external ethics committee
EIB has an ad hoc committee on post employment and a Compliance Officer, ECA and COM have ad hoc committees, respectively, on outside activities and on post-employment occupations
All bodies have only advisory powers and no own
inquiry and enforcement powers (except the Compliance Officer in the EIB)
Professional activities Restrictions for all institutions, MEPs are allowed to exercise professional activities
EU-institution Conflicts of ethics regime model European Investment Bank Model 1/Model 2
European Commission Model 1/Model 2 European Court of Auditors Model 2
European Central Bank Model 2/Model 3 European Parliament Model 3
European Court of Justice Cannot be classified into the different models because of the lack of a code of ethics, register, monitoring arrangements and an ethic committee