Private sector in corruption chain

MANILA, Philippines – Just as there is a value chain in agriculture, from production to marketing, there is also a corruption chain in the government’s agriculture grants—from product choice to its delivery to the farmer and fisherfolk beneficiaries.

For the corruption chain, many people blame the government. But then “evil thrives when good men do nothing.”

The private sector must be proactive in informing and supporting the government in all parts of this corruption chain.

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Often, the private sector knows more than the government about this chain. But for this public-private initiative to succeed, the government must exercise strong political will, instead of being complacent and even corrupting itself.

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Last June 18, a resolution was passed by the international trade committee of the Philippine Council for Agriculture and Fisheries (PCAF). PCAF is a legislated government-private body attached to the Department of Agriculture (DA).

The private sector has two major responsibilities: (1) formulate recommendations for DA to better achieve its agriculture development objectives and (2) monitor budget use so that DA can take the appropriate corrective action.

Resolution

The PCAF resolution was that DA should implement strictly an expanded monitoring system that the PCAF private sector member recommended.

This system started with monitoring the tail end of the corruption chain. It would now involve other parts of the chain, including the head.

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Right now, it is like cutting off one tentacle from an octopus, but not its head. The head would then use its other tentacles to continue the corruption.

Cutting off only the tentacles would do little to reduce corruption.

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For more than five years, the PCAF private sector-led budget monitoring teams recorded an average 30 percent nonutilization and underutilization rate of government grants given at the regional level. This corruption and waste continued simply because there was no penalty system.

Fortunately, this was reversed when Agriculture Secretary Francisco Tiu Laurel Jr. took over in late 2024. He showed political will in supporting the private sector’s efforts at curbing corruption.

Upon the private sector’s recommendation, Tiu Laurel ordered that the list of projects for monitoring would be selected by the private sector, not by the DA.

There was strong resistance to this.

It took two written directives and strong verbal instruction before all the DA Regional Executive Directors (REDs) complied.

It should be noted that the majority of the REDs cooperate fully and are not part of the problem.

After this was done, the private sector insisted that those found guilty of corruption should be severely punished. This had not been happening. Prevention is better that cure. They then recommended a system that is used effectively by the private banks.

This is a checklist of key requirements before any loan is granted. Those who didn’t follow this checklist would be dismissed.

Tiu Laurel supported this. In fact, he himself suggested an improvement in one of the six requirements in the checklist.

One specific requirement was that the elected private sector Regional Agriculture and Fisheries Council (RCAF) chairs must sign as witnesses to every completed checklist.

Again, there was tremendous resistance.

After three long months, there was finally compliance, but only at 71 percent.

True to DA’s promise of severe penalties to the private sector, noncompliance and other factors resulted in the immediate removal of three REDs.

Right after that, compliance rose to 97 percent, with the corresponding very positive results.

Corruption chain

Not stopping there, the private sector recommended action on the rest of the entire corruption chain.

They wanted RAFC monitoring in areas where corruption is already present, even before the checklist and the giving of grants.

RAFC Visayas Chair Buen Mondejar and Mindanao Chair Chris Lindo pointed out that rigging was happening in the choice of bidders and the prebidding conferences, where there were no private sector observers.

Last May 11, DA Undersecretary Roger Navarro wrote a directive that all REDs must now allow RAFC participation, but not decision-making, which is reserved for the government.

The transparency would be effective enough.

The PCAF committee resolution addressed two additional points: (1) that the same severe penalty system used for checklist compliance would be used for this other part of the corruption chain, and (2) that the start and source of the corruption chain (namely, the producer of the goods) would likewise be properly addressed.

The challenge now is for the private sector to go beyond complaining about corruption. They should instead help the government in addressing the different parts of the entire corruption chain.

Corruption thrives when many in the private sector do nothing.

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The author is Agriwatch chair, former secretary of presidential flagship programs and projects and former undersecretary of the Department of Agriculture and the Department of Trade and Industry. Contact is [email protected].