General Information

Political Climate

Bangladesh faces significant challenges as one of the poorest countries in the world. On top of this, corruption is endemic, the rule of law is weak, and there is limited bureaucratic transparency. During the last decade, the government of Bangladesh established legislation to combat different forms of corruption, including bribery, embezzlement, and money laundering. It has also attempted to address the culture of impunity by prosecuting corrupt officials and strengthening the country's Anti-Corruption Commission (ACC), and the current Awami-league government has publicly emphasised its commitment to combat corruption and the need of a strong ACC. Nevertheless, as noted by the US Department of State 2013, enforcement remains inconsistent. As a result, pervasive corruption, patronage, and the misallocation of resources have prevented the country from making a more significant developmental leap.

The Government of Bangladesh fought hard against the extremely high levels of corruption that have placed the country at or near the bottom of numerous transparency and corruption indices for several years. The interim government acceded to the United Nations Convention against Corruption (UNCAC) in February 2007. In the same year, the interim government also launched a campaign against corruption, resulting in the sentencing of many businesspeople, high-level political figures, and their family members for corruption and other illegal acts by special anti-corruption courts, set up to deal with the many corruption cases. This included charges against Prime Minister Sheikh Hasina Wajed, former Prime Minister Khaleda Zia, and around 150 other high-ranking political figures. The corruption charges against Prime Minister Sheikh Hasina were dropped in May 2010, due to lack of evidence. In August 2011, an arrest warrant was issued for Tarique Rahman, son of the former Prime Minister, on charges of money laundering. Despite these initiatives, the Bertelsmann Foundation 2012 notes that the anti-corruption drive initiated by the caretaker government (2007-2008) has begun to falter due to a political deadlock between the opposition and the ruling party. The report further notes that political parties generally are not wholehearted in their rhetoric about the elimination of corruption and are not inclined to develop institutional mechanisms to address the problem sufficiently. Accordingly, the country has not witnessed any dramatic changes for the better in the culture of corruption. 

Given a political environment rife with corruption, business executives surveyed in the World Economic Forum Global Competitiveness Report 2012-2013 report that the level of public trust in politicians is very low. Similarly, according to Transparency International’s Global Corruption Barometer 2013, the Bangladeshi political parties are widely perceived by the surveyed households to be corrupt. Only 22% of households evaluated the government’s anti-corruption initiatives as ‘effective’, while 60% of the surveyed perceive the level of corruption in Bangladesh to have increased over the past three years. This relative public disillusion with politics and corruption was further hampered when it was revealed in June 2012, that the World Bank would cancel a USD 1.2 billion loan to build the country's largest bridge, citing corruption concerns. According to a June 2012 article by the Wall Street Journal, the World Bank suspended its funding due to allegations that two former executives of the Canadian engineering and construction company, SNC-Lavalin, bribed Bangladeshi government officials to win a contract related to the construction of the bridge (read more about this case in this Profile's Public Procurement and Contracting Section). The cancellation of the loan and growing concerns over graft and corruption in the country, according to the article, could hamper the country's ability to attract foreign aid and investment.

Business and Corruption

Bangladesh has one of the most liberal investment regimes in the region and, as reported by the Commercial Environment Report 2012 by Dun & Bradstreet, there are no distinctions between foreign and domestic private investors regarding investment incentives or export and import policies. Nevertheless, the country reportedly faces difficulties in attracting foreign investment due to corruption. Corruption represents a serious impediment to efficient business operations in Bangladesh, as emphasised by the US Department of State 2013. Corruption and bribery in Bangladesh raises the costs and risks of doing business and are identified as common within public procurement, tax and customs administration, and regulatory authorities. The same report also notes that corruption in Bangladesh has resulted in annual losses amounting to 2 to 3% of the country's GDP. This perception is supported by the World Economic Forum Global Competitiveness Report 2012-2013, according to which, inadequate supply of infrastructure and corruption are the greatest constraints to foreign companies operating in Bangladesh. Corruption is reportedly present in most interactions with public authorities.

While laws on disclosure of assets and conflicts of interest exist, they are rarely enforced. Significant parts of the state budget (including state-owned companies) remain outside legislative control. Trade and business associations are often led by former government employees or politically active persons, leading to patron-client relations between government and business. According to the Transparency International Global Corruption Report 2009, the most dominant form of corruption taking place in the private sector during that year was asset stripping, followed by fraud and abuse of power. Despite the adoption of the Public Procurement Act 2006 and the Ordinance in 2007, the private sector has reportedly continued to engage in malpractice in the procurement process. According to the Global Competitiveness Report 2012-2013, Bangladesh performs poorly in relation to the ethical behaviour of companies in interactions with public officials, politicians, and other companies. Business executives also indicate that public funds are commonly diverted to companies, individuals, or groups due to corruption. Therefore, companies are recommended to use a specialised public procurement due diligence tool to reduce corruption risks related to public procurement in Bangladesh.

Bangladesh's formal economy is shadowed by a large informal sector. According to the Asian Development Bank 2012 report, nearly 77% of employment is provided for by enterprises in the informal sector, while 43% of the GDP derives from the informal sector. Furthermore, corporate and bureaucratic tax evasion is reportedly a common source of corruption. In order to better manage legal and financial corruption risks, companies are strongly recommended to develop, implement, and strengthen integrity systems and to conduct extensive due diligence when planning to do or already doing business in Bangladesh.

Regulatory Environment

Bureaucracy in Bangladesh functions relatively unchecked by both government and civil society. High-level civil servant,s in particular, constitute a strong interest group. The bureaucracy remains politicised in regards to recruitment and promotions, but lack of transparency and accountability seem to be the biggest problems. In the same vein, the Bertelsmann Foundation 2012 reports that administrative operations in the country are deficient due to widespread corruption, a politicised bureaucracy, and a lack of resources, as well as patronage. In addition, the government has exercised influence on local administrations and has significantly curtailed powers of elected local government officials. According to a 2012 research paper by the University of Dhaka Bangladesh, corruption and undue political influence are rampant in the civil service sector and the Public Service Commission, which has been undermined in recent years due to political interference (see more under 'Public Anti-Corruption Initiatives' in the Initiatives section). Officials sometimes obtain their positions and promotions through bribes and are not necessarily chosen on the basis of merit and skill. The same research paper further notes that bribing the staff of the Public Service Commission has been among the serious allegations that have damaged the status of the Commission. There are no rules limiting the acceptance of hospitality for civil servants. The combination of low salaries for public servants, the discretionary powers of the bureaucracy, and the complexity of the regulatory environment, encourages private-public corruption and the use of facilitation payments.

Business executives surveyed in the World Economic Forum Global Competitiveness Report 2012-2013 perceive government administrative requirements to be quite burdensome. They also report that government policy-making is fairly opaque and that government officials will usually favour well-connected companies and individuals when deciding on policies and contracts. Commercial regulations can be ambiguous and inconsistent, and the lack of transparency increases start-up and overall operational costs. According to the World Bank & IFC Doing Business 2013 starting a company requires an entrepreneur to go through 7 procedures and 19 days, at a cost equal to 25.1 % of GNI per capita on average. There is no minimum deposit requirement to obtain a company registration number, and the time required to start a company is less than the regional average.

Business executives surveyed in the Global Competitiveness Report 2012-2013 report that the judiciary is not independent from political influences from members of government, citizens, or companies. Moreover, the US Department of State 2013 states that the lack of effective judicial and alternative dispute resolution mechanisms impedes the enforcement of contracts and the resolution of business disputes in the country. It is common to include an arbitration clause in commercial contracts, as Bangladesh is a member of the International Centre for the Settlement of Investment Disputes (ICSID) and a signatory and contracting state of the New York Convention 1958. The enforcement of IPR is insufficient and there have been few convictions in relation to a large number of infringements. In the lower courts, where cases are first heard, corruption is perceived as a severe problem, according to the US Department of State 2010. The Bangladesh Export Promotion Bureau is known to offer assistance in dispute settlement of export-related transactions. Access the Lexadin World Law Guide for a collection of legislation in Bangladesh.

Judicial System

Individual Corruption

According to Transparency International's Global Corruption Barometer 2013, over half of the surveyed households perceive the judiciary to be corrupt, thus rendering the judiciary the second most corrupt sector in Bangladesh, out of the 12 institutions included in the survey. This is further supported by Transparency International Bangladesh National Household Survey 2012, where the judiciary is perceived as the most corrupt service sector in Bangladesh, with nearly 7 out of 10 surveyed households who had sought judicial services ending up victims of corruption. 

According to the US Department of State 2012, some human rights observers alleged that in many cases filed during 2012, magistrates, attorneys, and court officials demanded bribes from defendants. Furthermore, corruption within the judiciary has hindered many victims from obtaining a fair trial. 

Business Corruption

The World Bank & IFC Doing Business 2013 and the World Economic Forum Global Competitiveness Report 2012-2013 reveal that Bangladesh's courts are both inefficient and subject to political influences from members of government, citizens, and companies. Several sources, such as the Bertelsmann Foundation 2012 and Global Integrity 2010, point out that lower courts are marred by corruption and often subject to political interference. Therefore, companies involved in legal disputes should generally try to avoid the lower courts.

Political Corruption

In Bangladesh, court procedures are often cumbersome, politically influenced, and corruption-prone. This is confirmed by the US Department of State 2012, according to which, judicial corruption and inefficiency, lack of resources, and a large case backlog taint the judicial system. Furthermore, Freedom House 2013 notes that judicial appointments are marred by political bias. The impartial appointment of judges has spurred from the Supreme Court Bar Association; nevertheless, politicisation of the judiciary is still an issue in Bangladesh.

Another problem is that in 2008, the Appellate Division resumed the practice of overturning politically charged decisions by the High Court Division, usually to the benefit of the current government. In at least two cases, the Appellate Division overturned decisions granting bail to high-level corruption suspects who were leaders of opposition parties, according to the US Department of State 2012.

According to the US Department of State 2011, a former chief justice and several other judges from the high court division received a payment of USD 13,127 from the prime minister's Relief and Welfare Trust. The payments were made shortly before a series of rulings that nullified several constitutional amendments, including a provision that protected the electoral system from politicisation. The Ministry of Law, Justice, and Parliamentary Affairs confirmed the amounts transferred, and the former chief justice stated that the money he received was used to provide medical treatment for his wife.  

Frequency

The World Bank & IFC: Doing Business 2013:
- Enforcing a commercial contract in Bangladesh requires a company to fulfil 41 administrative procedures, taking an average of 1,442 days and costing an average of 63.3% of the claim.

Transparency International: Global Corruption Barometer 2013:
- 53% of the surveyed households perceive the judiciary to be corrupt or extremely corrupt.

- 63% of the surveyed households who have been in contact with the judiciary in 2012 report to have paid a bribe.

World Economic Forum: The Global Competitiveness Report 2012-2013:
- Business executives give the independence of the judiciary from influences of members of government, citizens, or companies a score of 2.8 on a 7-point scale (1 'heavily influenced' and 7 'entirely independent').

- Business executives give the efficiency of the legal system for private companies to settle disputes and to challenge the legality of government actions and/or regulations a score of 3.3 and 3.6 respectively on a 7-point scale (1 'extremely inefficient' and 7 'highly efficient').

Transparency International Bangladesh: National Household Survey - Corruption in the Service Sectors 2012:
- Of all household respondents who sought judicial services, 68% reported that they had to pay a bribe.

- Overall, the average sum of bribes paid was BDT 4,266.

Police

Individual Corruption

Police are perceived to be very corrupt in the eyes of Bangladeshi households. This is displayed in Transparency International’s Global Corruption Barometer 2013, in which the surveyed households perceive the police to be the institution most affected by corruption, out of 12 different institutions in the country. The same survey further reveals that almost three-quarters of the surveyed households report to have paid a bribe to the police services. According to another 2012 national household survey conducted by Transparency International Bangladesh, law enforcement agencies (e.g., Rapid Action Battalion and the police force) represent the second most corrupt service sector, with nearly 8 out of 10 surveyed households reported to having been victims of corruption or harassment when seeking services from these agencies. This is also supported in the Bertelsmann Foundation 2012 report, in which it states that the frequency of bribe-taking put law enforcement agencies at the top of the chart of most corrupt service sectors. 

A 2012 report, published by The Refugee Documentation Center, reports that pervasive corruption within the Bangladeshi police force is a direct result of the low salaries of police officials. Corruption coupled with impunity has made the security apparatus in Bangladesh not only one of the most corrupt institutions in the country, but also a tool in the hands of the ruling elite to deal with political opponents, as noted in the report. According to Global Integrity 2010, there is an independent mechanism for citizens to file a complaint against police misconduct. However, unless bribes are paid, the concerned higher authority does not always act on complaints.

Business Corruption

Business executives surveyed by the World Economic Forum Global Competitiveness Report 2012-2013 state that the police cannot be consistently relied upon to enforce law and order.

Political Corruption

According to Global Integrity 2010, law enforcement agencies are not protected from political interference, and appointments to the police department are often influenced by bribes, nepotism, and party loyalties, rather than professional qualifications.

According to the US Department of State 2012, the government has taken steps to address police corruption and integrity issues. Yet, corruption and impunity continue to be widespread within the force, and the punishment of officials who have committed abuses is predominantly limited to those perceived to be opponents of the Awami League government. The same report further notes that citizens were reluctant to file complaints as cases are dragged through lengthy processes and witnesses fear retribution. Thus, fear of reporting police corruption has perpetuated a climate of impunity among officials.

Frequency

Transparency International: Global Corruption Barometer 2013:
- 64% of citizens perceive the police to be corrupt or extremely corrupt.

-72% of the surveyed households who have been in contact with the police services in 2012 report to have paid a bribe.

World Economic Forum: The Global Competitiveness Report 2012-2013:
- Business executives give the reliability of police services a score of 3 on a 7-point scale (1 'cannot be relied upon to enforce law and order' and 7 'can be relied upon to enforce law and order').

Transparency International Bangladesh: National Household Survey - Corruption in the Service Sectors 2012:
- Of all household respondents who received services from law enforcement agencies, 75.8% reported they had experienced corruption and harassment.

- The average amount of a bribe when interacting with law enforcement agencies was BDT 7,080.

Licences, Infrastructure and Public Utilities

Individual Corruption

Many Bangladeshi citizens perceive that the corruption involved in getting utilities connected and sustained is widespread. For instance, according to Transparency International's Global Corruption Barometer 2013, one-tenth of the surveyed households report to have paid a bribe in connection with obtaining public utilities. The same is also true for the surveyed households who have been in contact with the educational and medical system, as one-tenth and almost one-fifth, respectively, paid a bribe for obtaining services.

In addition, according to the Transparency International Bangladesh National Household Survey 2012, a significant percentage of surveyed households that sought electricity services were reported to be victims of corruption and harassment.

Business Corruption

According to the US Department of State 2013, companies often complain that ministries require unnecessary licences and permits. In general, it is both expensive and difficult to obtain access to public utilities. This is further supported by the World Economic Forum Global Competitiveness Report 2012-2013, which notes that inefficient government bureaucracy is one of the main obstacles to doing business in Bangladesh.

Companies should be aware that business inspections by government officials to ensure public health and safety standards are usually carried out in an arbitrary and ad-hoc manner, as reported by Global Integrity 2010.

Political Corruption

According to an April 2012 article by BBC News Asia, the Bangladeshi rail minister resigned due to a corruption scandal within his ministry. According to the article, his personal secretary and two rail officials were caught with GBP 54,000 in a minibus, which allegedly came from applicants seeking jobs within the railway. The officials told local newspapers that they were headed to the minister's house with the money. The minister denied having anything to do with the case and explained that he resigned to preserve democracy and transparency. He resigned, according to himself, for the sake of fair investigation and to not influence the case. 

Frequency

The World Bank & IFC: Doing Business 2013:
- Dealing with construction permits in Bangladesh requires a company to go through 11 administrative procedures, which takes an average of 201 days, and costs 126.5% of income per capita.

Transparency International: Global Corruption Barometer 2013:
- 12% of citizens who have been in contact with the education system in Bangladesh in 2012 report to have paid a bribe.

-10% of citizens who have been in contact with public utilities services in Bangladesh in 2012 report to have paid a bribe.

-16% of citizens who have been in contact with the medical system in Bangladesh in 2012 report to have paid a bribe.

World Economic Forum: The Global Competitiveness Report 2012-2013:
- Business executives give the government administrative requirements (permits, regulations, reporting) in Bangladesh a score of 3.2 on a 7-point scale (1 'burdensome' and 7 'not burdensome').

Transparency International Bangladesh: National Household Survey - Corruption in the Service Sectors 2012:
- Of all household respondents who received electricity services, 18.3% reported they had experienced corruption and harassment.

- Of all household respondents who received health services from government and private hospitals, 40.2% reported that they had experienced corruption and irregularities.

- Of all household respondents who received educational services from different academic institutions, 40.1% reported that they had experienced corruption and irregularities.

- The average sum of a bribe when interacting with electricity departments was BDT 1,725.

- The average sum of a bribe when interacting with health departments was BDT 258.

- The average sum of a bribe when interacting with education departments was BDT 100.

Land Administration

Individual Corruption

According to the Transparency International Global Corruption Barometer 2013, almost half of the surveyed citizens who have been in contact with land services in 2012 report to have paid a bribe. Furthermore, the Transparency International Bangladesh National Household Survey 2012 illustrates that a significant percentage of surveyed households that have dealt with the land administration—such as paying land development taxes— have experienced corruption and harassment.

According to the Bertelsmann Foundation 2012, patronage networks linking landowners, the police, and state bureaucrats, make it difficult for peasants to assert their property rights in rural areas in Bangladesh.

Business Corruption

According to the Bertelsmann Foundation 2012, property rights are legally safeguarded, but problems remain in practice. According to the World Economic Forum Global Competitiveness Report 2012-2013, Bangladesh scores very low when it comes to the protection of property rights. Registries of property are inadequate and unreliable, which can cause problems when transferring ownership of land and property. 

Political Corruption

A 2012 report published by U4 Anti-Corruption Resource Center cites a 2012 study conducted by Transparency International, which reveals that a significant number of Parliament Members have been involved in the illegal takeover of government land. The same report further notes that the construction sector is also riddled with corruption; bribery and abuse of power within the authority in charge of land use, planning, and implementation has resulted in corrupt construction projects.

Among Bangladesh's most important construction scandals is the collapse of an eight-story factory in April 2013. The factory, owned by the leader of the youth group of the ruling Awami League, was allegedly built on an illegally obtained piece of land and operated without permission for its three extra floors, as reported by a June 2013 press release by Transparency International. The factory had already lost its operating licence months before the accident that resulted in the death of 112 employees. Rana, the owner of the factory, enjoys strong political connections and has previously been involved in illegal constructions with impunity. Yet, following the collapse, the Prime Minister of Bangladesh ordered Rana's arrest, as reported by an April 2013 article published by Fox News.

Frequency

The World Bank & IFC: Doing Business 2013:
- Registering property requires a company to go through an average of 8 administrative procedures, taking an average of 245 days at a cost of 6.8% of the property value.

Transparency International: Global Corruption Barometer 2013:
- 44% of the surveyed households who have been in contact with land services in 2012 report to have paid a bribe.

World Economic Forum: The Global Competitiveness Report 2012-2013:
- Business executives give the protection of property rights in Bangladesh, including financial assets, a score of 3.6 on a 7-point scale (1 'very weak' and 7 'very strong').

Transparency International Bangladesh: National Household Survey - Corruption in the Service Sectors 2012:
- Of all household respondents who received services from the land administration, 77% reported that they had experienced corruption and harassment.

- The average sum of a bribe when interacting with the land departments was BDT 7,807.

Tax Administration

Individual Corruption

According to the Transparency International Global Corruption Barometer 2013, less than one-tenth of citizens who have been in contact with tax services in 2012 report to have paid a bribe. Yet, the Transparency International Bangladesh National Household Survey 2012 reports that out of all household respondents who received tax-related services from tax offices, more than two-thirds of them reported to have experienced corruption, harassment, or irregularities.

Business Corruption

According to Global Integrity 2010, tax laws are not always uniformly enforced without discrimination. The same source also reports that the National Board of Revenue, the central authority for tax administration in Bangladesh, is one of the most corrupt government agencies in the country. The World Economic Forum Global Competitiveness Report 2012-2013 further notes that tax rates and tax regulations are cited by business executives to be among the obstacles to doing business in Bangladesh.

Political Corruption

A 2010 article by The Financial Express reports that in 2007, the wife of the former Minister of Housing and Public Works, Afroza Abbas, was sentenced to 16 years in prison and a BDT 49.2 million fine on charges of tax evasion. She was convicted of concealing information about wealth on tax returns and for providing false information on the returns. In April 2010, Abbas was granted bail by the High Court.

According to a March 2011 news article by The Daily Star, a total of BDT 21,000 crore (a crore equals BDT10 million) in taxes was evaded by taxpayers in the fiscal year of 2009-2010. According to the article, corrupt practices by tax officials are cited as one of the main challenges facing the National Board of Revenue at the moment.

Frequency

The World Bank & IFC: Doing Business 2013:
- Companies are required to make 20 tax payments and spend 302 hours on average at a total tax rate of 35% of profits annually to manage the burden of paying taxes.

Transparency International: Global Corruption Barometer 2013:
-8% of the surveyed households who have been in contact with the tax services in Bangladesh in 2012 report to have paid a bribe. 

Transparency International Bangladesh: National Household Survey - Corruption in the Service Sectors 2012:
- Of all household respondents who received tax-related services from tax offices, 71.9% reported that they had experienced corruption, harassment and irregularities.

- The average sum of a bribe paid to the tax and customs departments was BDT 3,482.

Customs Administration

Business Corruption

The US Department of State 2013 reported that businesspeople often complain about petty corruption, such as the need to make unofficial payments within the customs administration. A similar trend is also reflected in the World Economic Forum Global Enabling Trade Report 2012, in which business executives ranked border administration (in relation to irregular payments in exports and imports) as not always transparent in Bangladesh, and therefore constituting a competitive disadvantage for the country.

According to a Commercial Environment 2012 report by Dun & Bradstreet, the customs administration in Bangladesh is cited among the most corrupt sectors; officials routinely exert their power to influence the tariff value of imports and to expedite or delay import and export processing at the ports. As such, the main obstacles to trade are the continuing lack of transparency in trade regulations and policy changes which are often unclear, inconsistent and only implemented after long delays, in addition to the significant scope of corruption within customs, which increases uncertainty and the cost of trading within Bangladesh.  

Political Corruption

Chittagong Port, which handles 85% of Bangladesh’s total imports and exports, is considered to be one of the most inefficient and corrupt ports in Asia, according to Transparency International Bangladesh’s Problems and Potentials of Chittagong Port 2007. According to the report, corruption has become institutionalised in the offices of the port where bribes or facilitation payments are expected if a task or procedure needs to be completed. In order to submit or amend mandatory import and export documents, bribes are paid in virtually all transactions. It was observed in March 2007 that paying bribes at numerous locations in order to anchor a ship in the port was not unusual. The report states that bribery takes place outside the port by reaching an understanding through agents. The pilots of the port take BDT 10,000 as tips for anchoring a ship and then for taking it to outer anchorage. In case of over drafting of ships, the rate can exceed BDT 100,000.

Frequency

The World Bank & IFC: Doing Business 2013:
- A standard export shipment of goods requires 6 documents and takes an average of 25 days at a cost of USD 1,025 per container.

- A standard import shipment of goods requires 8 documents and takes an average of 34 days at a cost of USD 1,430 per container.

World Economic Forum: The Global Competitiveness Report 2012-2013:
- Business executives give the efficiency of customs procedures (formalities regulating the entry and exit of merchandise) in Bangladesh score of 3.2 on a 7-point scale (1 'extremely inefficient' and 7 'extremely efficient').

World Economic Forum: The Global Enabling Trade Report 2012:
- Business executives give the pervasiveness of irregular payments in exports and imports (pervasiveness of undocumented extra payments or bribes connected with imports and exports) in Bangladesh a score of 2.4 on a 7-point scale (1 'non-transparent' and 7 'transparent').

Transparency International Bangladesh: National Household Survey - Corruption in the Service Sectors 2012:
- The average amount of a bribe paid to the tax and customs departments was BDT 3,482.

Public Procurement and Contracting

Business Corruption

According to Global Integrity 2010, conflict of interest regulations for procurement officials are not well enforced in practice, and there is no mechanism to monitor the assets, incomes, and spending habits of public procurement officials. Companies guilty of major violations of procurement regulations, such as bribery, are not always prohibited from participating in future procurement bids. It is further alleged that some powerful companies will not be affected by debarment. Nevertheless, according to Global Integrity 2010, more than 50 companies have been banned from the bidding process for violating procurement regulations between 2009 and 2010.

Business executives in the World Economic Forum Global Competitiveness Report 2012-2013 report that government officials often favour well-connected companies and individuals when awarding contracts. Rules and criteria are frequently manipulated to fit specific providers, as reported in Global Integrity 2010. Companies are therefore recommended to use a specialised public procurement due diligence tool in order to mitigate the corruption risks associated with public procurement in Bangladesh.

Read more about public procurement under 'Public Anti-Corruption Initiatives' in the Initiatives section.

Political Corruption

According to Global Integrity 2010, collusion between political leaders and bureaucrats in public contracting sometimes occurs in order to favour a particular bidder.

In April 2011, the World Bank signed a deal to lend Bangladesh USD 1.2 billion to build the country's largest bridge, stretching four-miles over the Padma River. The bridge was supposed to link Bangladesh's underdeveloped south to the capital and the country's main port, benefiting 30 million people and improving the country's infrastructure. However, according to a June 2012 article by the Wall Street Journal, the World Bank cancelled the loan due to allegations of corruption. The bank suspended its funding due to allegations that two former executives of the Canadian engineering and construction company, SNC-Lavalin, bribed Bangladeshi government officials to win a contract related to the construction of the bridge. The World Bank had provided the government with credible evidence of corruption and the Bangladeshi government instructed its Anti-Corruption Commission to investigate the matter and reassigned the minister who was overseeing the project. Nevertheless, these actions proved to be unsatisfactory to the World Bank.

Read more about public procurement under 'Public Anti-Corruption Initiatives' in the Initiatives section.

Frequency

World Economic Forum: The Global Competitiveness Report 2012-2013:
- Business executives give the diversion of public funds to companies, individuals, or groups due to corruption a score of 2.6 on a 7-point scale (1 'very common' and 7 'never occurs').

- Business executives rate the favouritism of government officials when deciding upon policies and contracts at 2.2 on a 7-point scale (1 'always show favouritism' and 7 'never show favouritism').

Environment, Natural Resources and Extractive Industry

Business Corruption

According to Global Integrity 2010, business inspections by government officials to ensure public environment standards are often carried out in an arbitrary and ad hoc manner. It is also alleged that companies often pay bribes when dealing with environmental inspections to circumvent environmental rules.

Political Corruption

According to investigations undertaken by the Anti-Corruption Commission (ACC) in the water sector, corruption in different projects run by the Ministry of Water Resources was estimated to be approximately USD 1.5 billion during 2001–06, as reported by the Strategic Foresight Group. An important reason for this corruption is the creation and existence of monopolies in the water sector because of the power and control exerted by the public sector over water delivery systems. This monopolistic nature has progressively encouraged bribery and red tape to become institutionalised within the water sector. This is further supported by a 2012 report published by U4 Anti-Corruption Resource Center, which notes that a study conducted by Transparency International in 2012 reveals that Parliament Members were involved in taking illegal possession of water bodies.

According to a Commercial Environment 2012 report by Dun & Bradstreet, there are hopes that Bangladesh may be able to develop significant natural gas resources, as the Bangladesh petroleum Exploration and Production company announced in 2011 the discovery of a new reserve of gas with an estimated 1 trillion cubic feet. Nevertheless, mismanagement of the gas sector via state owned companies has contributed to a crippling domestic energy shortage.  

Public Anti-Corruption Initiatives

  • Legislation: Bangladesh accessed the United Nations Convention against Corruption in February 2007. The Code of Criminal Procedure 1898, the Prevention of Corruption Act 1947, the Penal Code 1860, and the Money Laundering Prevention Act 2002 criminalise attempted corruption, extortion, active and passive bribery, bribery of foreign public officials, money laundering, and using public resources or confidential state information for private gain. Business-to-business corruption is not covered by Bangladesh's current legislative anti-corruption framework. In April 2008, the definition of money laundering as given by the 2002 Act was modified by the enactment of the Money Laundering Prevention Ordinance 2008. The definition of money laundering has been extended to cover various processes through which the crime is being committed, including 'predicate offences', such as corruption and bribery, forgery of currencies and documents, extortion, cheating, dealing in illegal arms and drugs, smuggling, abduction for ransom, murder, and the transfer of concealed money to other countries from Bangladesh or receiving such money from other countries into Bangladesh. In 2009, the Anti-Money Laundering Law was further amended to incorporate laws to prevent stock market manipulation and a provision that allows documents provided by foreign governments to be admissible in court for bringing back siphoned off money from abroad. In January 2012, the Government of Bangladesh further endorsed a draft of the Money Laundering Act 2012, keeping to the provision of a maximum 12 years and minimum 4 years jail for the offence. The Anti-Corruption Commission Act 2004 provides the legal framework for an independent commission to ensure transparency in the public sector. The Voluntary Disclosure of Information Ordinance was approved in May 2008, forming the basis for the establishment of the so-called 'Corruption Truth Commission'. The Commission gives partial amnesties in return for information about corruption. However, according to a BBC News article published in May 2011, the commission was declared illegal and unconstitutional by the Supreme Court, citing that there was no provision in the Constitution to give amnesty to individuals accused of corruption. The interim government made amendments to the Criminal Procedure Code Ordinance in February 2007, as a part of the process of separating the judiciary from the executive branch of the government. However, after the Awami League won the elections and Sheikh Hasina again became prime minister, these were rejected. Other significant ordinances, including the Right to Information Ordinance 2008, have been ratified by the Parliament. The Right to Information Act 2009 (view a summary of the Right to Information Act 2009) is designated to play an important role in ensuring transparency and accountability. Access the Lexadin World Law Guide for a collection of legislation in Bangladesh.
  • Government Strategies: The interim government, which stepped down in December 2008, was characterised by an aggressive anti-corruption drive targeting high-level political figures, administrative officials, as well as private actors. Many prominent political figures and representatives of the business community had been detained and charged with corruption. Many had been convicted on these charges; however, according to the Bertelsmann Foundation 2010, many of these convicted individuals were also later released on bail. The current Awami League government has pledged to fight corruption and reaffirmed the need for a strong anticorruption commission. However, it has taken steps to loosen experience requirements in public procurement laws and has also approved an amendment to the Anti-Corruption Commission Act (see ‘Anti-Corruption Agency’ below for more information). According to the US Department of State 2013, both measures have been widely criticised as weakening safeguards against corruption.

  • Anti-Corruption Agency: The Anti-Corruption Commission (ACC) was established in accordance with the Anti-Corruption Commission Act 2004. According to the US Department of State 2012, the number of corruption cases filed under the government is significantly less compared to the caretaker government, and a government commission has recommended that the ACC drop thousands of corruption cases. The report further notes that the ACC was used by the government to prosecute politically motivated cases. According to the US Department of State 2011, the government appointed a former bureaucrat and a retired judge, both publicly identified with the ruling AL, as commissioners of the ACC in February 2011. The Bertelsmann Foundation 2012 reports that the former chief of the ACC resigned under pressure from the government and the new chief has complained about the regressive role of the Commission. The report also notes that the government has attempted to amend the law that would restrict the ability of the ACC to file cases against any public servant, including lawmakers and judges. Global Integrity 2010 points out that the ACC does not receive sufficient funding or enough professional employees to sufficiently fulfil its mandate. The ACC is accountable to the President and publishes annual reports on its website. In association with Transparency International Bangladesh, the ACC has held awareness campaigns against corruption as part of its programme to hold seminars, symposiums, and workshops related to the issue. On a less positive note, in April 2009, the Bangladeshi Parliament approved proposals to amend the Anti-Corruption Commission Act, which includes making the ACC obliged to seek permission from the government before investigating state officials, and making the ACC accountable to the President, with the government in charge of appointing and removing the secretary of the body. In addition, in accordance with these proposals, those filing false cases will face five years in prison. A 2011 report published by Transparency International Bangladesh called for reconsidering the passage of the amendments as these were criticised for curtailing the investigative powers and the independence of the ACC. As of 2013, the amendments have still not been passed. Nevertheless, the ACC is not corruption free itself, as reported in a January 2011 news article by AFP. The deputy director of the ACC was arrested after having been filmed taking a USD 14,000 bribe from the owner of a garment export company.

  • National Coordination Committee (NCC): The NCC was constituted to lead the countrywide operation to curb corruption. The NCC is manned by all general officers commanding (GOCs), secretaries to the Chief Advisor's Office and the Anti-Corruption Commission, the Chairman of the National Board of Revenue, the Director General of the Central Intelligence Cell of the National Board of Revenue, and other top government officials. The interim government also set up a Financial Intelligence Unit to investigate financial crimes, recover assets, as well as money that had been laundered abroad. In May 2007, the Anti-Money Laundering Department (AMLD, see below) of the Central Bank was designated as Bangladesh's financial intelligence unit (FIU).

  • Anti-Money Laundering Department (AMLD): The AMLD is the official financial intelligence unit (FIU) in Bangladesh. The legal authority of the AMLD emanates from the Money Laundering Prevention Act 2009 (in Bangla), and the Anti-Terrorism Act 2009. According to Transparency International's Global Corruption Report 2009, the Money Laundering Prevention Ordinance 2008 provides that the courts will not take into consideration any money laundering case without approval from the Anti-Corruption Commission. In addition, this ordinance provides for the Central Bank to seek help from countries or agencies to investigate and recover assets through memoranda of understanding, contracts and conventions with governments or organisations. In 2009, the Anti-Money Laundering law was further amended to incorporate laws to prevent stock market manipulation and a provision that says documents provided by foreign governments will be admissible in court for bringing back siphoned off money from abroad. In January 2012, the government of Bangladesh further endorsed a draft of the Money Laundering Act 2012 keeping to provision of maximum 12 years and minimum 4 years jail for the offence. 

  • Office of the Ombudsman: The Constitution of Bangladesh and the Ombudsman Act 1980 contain provisions for the establishment of the Office of the Ombudsman; however, only the Office of the Tax Ombudsman has been set up in practice. The quasi-judicial mandate of the Office of the Tax Ombudsman is to receive taxpayer complaints in relation to income tax, value added tax and customs duties, and to investigate and make recommendations based on these complaints, in order to hold the National Board of Revenue accountable for malpractice. Global Integrity 2010 illustrates that sources differ on their analyses of the effectiveness of the Office of the Tax Ombudsman. Some claim that its recommendations are followed by the National Board of Revenue, while others argue that the institution is little more than a 'watch-dog in chains'. According to Global Integrity 2010, the government has started a process to abolish the Tax Ombudsman Act and the Office of the Tax Ombudsman. The given reason is that the existing Tax Ombudsman Act is conflicting with the tax laws. As of 2011, the Office of the Tax Ombudsman of Bangladesh has been effectively abolished.

  • Auditor General: The Office of the Comptroller and Auditor General (CAG) is a formally independent organ that works as the supreme audit institution of Bangladesh. According to Global Integrity 2010, the appointments to the CAG do not always support its independence, and individuals appointed are sometimes based on political and other considerations, rather than professional qualifications. The CAG is important for identifying financial irregularities. The Comptroller and Auditor General is appointed by the president, and charged with auditing the expenses of all government bodies. The CAG is required to submit its audit reports to the president and reports are also available online. According to the same source, the government often does not act on the findings; only an average of 20% of its audit reports are discussed in the concerned parliamentary standing committee and 22% of the recommendations are implemented by the audited organisations. Projects funded by foreign assistance do not fall under the purview of the CAG.

  • Bangladesh Public Service Commission (BPSC): The BPSC is a quasi-judicial body established in 1972, and mandated to ensure fair and transparent public sector recruitment, but has been criticised for a lack of independence, its vulnerability to partisan influence, and for its inefficiency. Bribery and the sale of undue advantages to applicants have been reported, mostly due to the lack of internal integrity and deterrence systems. This is supported by a 2012 research paper, which notes that the BPSC's credibility has been undermined due to serious allegations of bribe-taking by its staff. Furthermore, the appointments of politically aligned persons as its chair and members have further strengthened the belief that the Commission has served as a tool to establish a partisan control over the civil service recruitment process. The work of the BPSC has been reported as inadequate in connection with the Official Secrets Act, which has been used to withhold information. However, the Right to Information Act 2009 overrides the Official Secrets Act and several other restrictive acts. Nevertheless, the US Department of State 2012 comments that the Right to Information Act is not fully implemented in practice.

  • E-Governance: In the United Nations’ E-Government Survey 2010, Bangladesh’s e-government development is ranked 134th out of 192 UN member states, indicating that e-governance is still in need of development. Development is proceeding at a slow pace, partly due to the lack of access to the internet among many Bangladeshis. However, most ministries and government institutions have launched their own websites, such as those of the Ministry of Finance and the Office of the Comptroller and Auditor General. Furthermore, people can declare their taxes online through the National Board of Revenue. An e-Government web portal has also been developed to provide more convenient access to various government services and information through a one-window approach. In the capital, Dhaka, people can handle birth registrations and apply for trade licences online.

  • Public Procurement: In an effort to make public procurement more accountable and transparent, the Public Procurement Act was passed in 2006 and the new set of Public Procurement Rules (see the link 'Procurement Policy') was issued in 2008. Both were made effective on 31 January 2008. The Public Procurement Act 2006 has unified public procurement procedures for all government procuring entities. The regulations have been framed in order to ensure fair, transparent, and non-discriminatory public procurement and they explicitly address corruption issues. According to the public procurement regulations, all procurement officials should receive training on how to correctly apply the regulations and procedures. Companies that violate the procurement regulations risk being blacklisted, and according to Global Integrity 2010, more than 50 companies have been excluded from the bidding process for violating the procurement rules between 2009 and 2010. According to Transparency International’s Global Corruption Report 2009, despite the adoption of the Public Procurement Act 2006, the private sector has reportedly continued to engage in malpractice in the procurement process. In the beginning of 2010, the government established a 27-member watchdog body, the Public-Private Stakeholders Committee (PPSC), in order to monitor the public procurement process and ensure transparency and accountability. The committee is expected to annually evaluate the overall impact of the Public Procurement Act and discuss any detected irregularity in its meetings, according to a February 2010 article by The Daily Star. The government publishes a debarment list on the Central Procurement Technical Unit website. The Central Procurement Technical Unit also operates the national e-Government Procurement portal. On this website, companies can also find tenders advertised, standard tender documents, and public procurement regulations and acts.

  • Whistleblowing: Several pieces of Bangladeshi legislation (e.g., the Anti-Corruption Commission Act 2004) provide a framework for the protection of whistleblowers in the public sectors, but they do not safeguard the private sector employees who report corruption cases. In September 2010, the new Whistleblower Protection Act was proposed to Parliament for discussions and, according to a March 2010 article by Bdnews 24, the newly drafted bill will be applicable to employees for both public and private sectors. In 2012, the Whistleblower Protection Act was adopted to protect the identities of information providers and ensure good governance. Cases of corruption related to the public sector can be reported to the Anti-Corruption Commission by post or by e-mail. According to a September 2012 article by Bangladesh Sangbad Sangstha, the ACC urges government and non-government employees to report on corruption within their offices under the newly enacted Whistleblower Protection Act. The article further explains that in accordance with the law, no civil or criminal case can be filed against the persons who provide correct information and they cannot be made to testify in any case. In addition, the whistleblowers would be awarded by appropriate authorities if the courts give final verdicts on the basis of their information. On the other hand, giving false information or accusations can result in punishment. Despite the protection provisions provided by the Whistleblower Protection Act, a significant 64% of citizens surveyed by Transparency International's Global Corruption Barometer 2013 reveal that they would not report cases of corruption from fear of retribution.

  • General Comments on the Public Anti-Corruption Initiatives: When the interim government came to power in 2007, it initiated a massive anti-corruption drive. By the time it had stepped down in December 2008, there had been many corruption trials, and many business people and politicians had been convicted of corruption crimes. However, there were also many cases against leading Awami League party (AL) politicians that have been dismissed, since the AL-led government took office in January 2009. Rather than making the Anti-Corruption Commission more independent and effective, the government has approved an amendment to the ACC Act that would significantly undermine its independence and hamper its effectiveness. To curb corruption in the country, certain initiatives must be prioritised such as the appointment of an ombudsman and the disclosure of public officials and their families' assets. Corruption remains a significant problem in Bangladesh, and in order to fully combat corruption, Bangladesh needs structural changes in politics, much more accountability and transparency in governance as well as the political will to continue the fight against corruption at all levels.

Private Anti-Corruption Initiatives

  • Media: The Constitution provides for freedom of expression and freedom of the press, and according to Freedom House 2012, the media environment remained relatively open throughout the year of 2011, despite some signs of intolerance by the government. For instance, the government issued new licences to operate television channels to political supporters and denied new licences to political opponents, a practice that was also common in the past. The Bertelsmann Foundation 2012 reports that both print and electronic media are diverse and vibrant. Tight media constraints were put in place during the military-backed interim government's state of emergency. Nevertheless, in September 2008, the interim government passed the Right to Information Ordinance 2008, granting journalists and citizens increased access to information. Using the Right to Information Ordinance as a foundation, the current government passed the Right to Information Act 2009 (view a summary of the Right to Information Act 2009) in March 2009, which should allow civil society and the press to play a better role in ensuring government transparency and accountability. Some privately owned newspapers write critical articles on government policies and activities, although persecution of journalists and self-censorship is not uncommon. According to the US Department of State 2012,there have been instances of the government limiting freedom of speech and press, continuing self-censorship, and security force harassment of journalists. In fact, during 2012, four journalists were killed, 118 were injured, 50 were threatened, six were attacked, and 43 were assaulted. According to the US Department of State 2011, the editor of the online news portal SheershaNews was arrested on allegations of extortion, a charge that was perceived as fabricated. The charges are seen as retaliation for the editor's reports on corruption within the government's ministries. Authorities revoked the press credentials of the portal's journalists, making it impossible to cover official events and forcing the news agency to shut down. Reporters Without Borders 2013 ranks Bangladesh 144th out of 179 countries, and Freedom House 2013 ranks Bangladesh 112th out of 197 countries and describes the country's press environment as "partly free".

  • Civil Society: Freedom of association is constitutionally provided for and is generally respected. Under the emergency regulations of the interim government, freedom of assembly and association were suspended and all political activity was banned, including indoor meetings, marches, and rallies. With the return to a civilian government, operational conditions for civil society have normalised. Numerous NGOs operate in Bangladesh, and civil society in Bangladesh has been successful in engaging in empowerment programs, as well as raising awareness in social and political issues, as reported by the Bertelsmann Foundation 2012. Global Integrity 2010 reports that NGOs and CSOs promoting good governance and anti-corruption face difficulties or harassment in becoming registered. According to Freedom House 2013, the organisations that focus on sensitive political and religious topics do so at some risk. NGOs that are critical of the government and those that deal with human rights issues are under supervision from the authorities and are subject to harassment. The same report further notes that authorities annulled the registration of thousands of NGOs during 2012 and the government announced the drafting of legislation that will further restrict foreign donations to NGOs in Bangladesh.

  • Transparency International Bangladesh (TIB): TIB is a local chapter of Transparency International. TIB conducts campaigns, issues reports, and raises awareness in relation to corruption. TIB also carries out research on corruption and publishes surveys and analyses of corruption in various sectors in Bangladesh. TIB was on occasion consulted by the interim government, for instance in connection with reviewing the Public Procurement Act 2006. In November 2007, TIB hosted the South Asia regional workshop on transparency and integrity in the water sector, and it held three seminars around Bangladesh at the end of 2008 on corruption in public administration. The TIB has catalysed or been directly involved in a number of key institutional and policy changes, including the reform of the Anti-Corruption Commission, the ratification of the UNCAC, the adoption of the Right to Information Act, and most recently, the TIB has also worked with the Ministry of Law regarding the drafting of the Whistleblower Protection Act. Click here to read TIB Annual Report 2011.

  • Bangladesh Enterprise Institute (BEI): The BEI promotes issues of importance to the private sector and seeks to influence policy for the development of a market-oriented economy. It is a project-oriented institute that works with projects to promote transparency and to fight corruption. The BEI publishes newsletters and annual reports that can be accessed on its website.

 

Resources

The websites listed below provide useful facts on Bangladesh, as well as contacts and tools for companies operating in Bangladesh:

Sources for further reading:

Conventions and Indices

UNCAC Status: Accessed 27 February 2007.

Status on UNCAC Implementation
This field describes the country's status with the United Nations Convention against Corruption. Please note any declarations and reservations made upon ratification. The list of signatories can be found on the UNODC website. Read more about the UNCAC.

Other Relevant Conventions or Treaties:

 

Transparency CPI: 2012: 144/176 (Score: 26)

Transparency CPI
This field consists of the score for the country in question on the Corruption Perceptions Index from Transparency International as well as its ranking.

World Bank CORR Index (-2.5 - +2.5): 2012: -0.9

World Bank Corruption Index
This field consists of the score for the country in question on the 'Control of Corruption' indicator in the Worldwide Governance Indicators (WGI): 1996-2012.

OECD Country Risk Classification (0-7): 2013: 6

Country Risk Classification
The classification of countries by risk category has the aim of providing OECD countries with a basis for calculating the premium interest rate to be charged to cover the risk of non-repayment of export credits. Countries are placed in risk categories 0 - 7, with 0 being the lowest risk category and thus the least expensive. Conversely, premium group 7 is the highest risk category. Each classification is comprised of 2 components: 1) an assessment of the country's economic/financial situation, and 2) its overall political stability. Access the complete list of OECD Country Risk Classification figures.

Data Verification:

Publication date: August 2013

Data verified by: GAN Integrity Solutions 

Information Network

 


Relevant Organisations

 

Transparency International Bangladesh (TIB)

House 141, Block E,
Road 12, Banani
Dhaka 1213

Tel: +880 2 988 7884/ 882 6036
Fax: +880 2 988 4811
E-mail: advocacy(at)ti-bangladesh.org/ info(at)ti-bangladesh.org

NGO. Transparency International local chapter.

Bangladesh Enterprise Institute (BEI)

House 3A, Road 50
Gulshan 2
Dhaka 1212

Tel: +880 2 986 2645/ 989 6805/ 2662/ 2663
Fax: +880 2 988 8583
E-mail: bei(at)bol-online.com

A non-profit, non-political research centre.

ICC Bangladesh

Suvastu Tower, 6th Floor
69/1, Panthapath
Dhaka 1205

Tel.: +880 2 967 6698/ 862 1942
Fax: +880 2 862 1027
E-mail: iccb(at)bdmail.net / info(at)icc-bd.org

Chamber of Commerce. Business confederation.

 


Partner Embassies

 

Embassy of Denmark

House 1, Road 51
Gulshan 2
Dhaka 1212

Tel: +880 2 882 1799
Fax: +880 2 882 3638
E-mail: dacamb(at)um.dk

Embassy.

Embassy of Sweden

House 1, Road 51
Gulshan
Dhaka 1212

Tel: +880 2 883 3144/45/46/47
Fax: +880 2 882 3948
E-mail: ambassaden.dhaka(at)foreign.ministry.se

Embassy.

Embassy of Norway

House 9, Road 111
Gulshan
Dhaka 1212

Tel: +880 2 882 3880/ 3065
      +880 2 881 6276/ 0563/ 6303
Fax: +880 2 882 3661
E-mail: emb.dhaka(at)mfa.no

Embassy.

British Embassy

United Nations Road
Baridhara
P.O. Box 6079
Dhaka 1212

Tel: +880 2 822 2705-9
Fax: +880 2 822 3666 (Immigration Section)
       + 880 2 882 3437 (Chancery/ Management)
      + 880 2 988 2819 (Consular)
E-mail: Consular.bangladesh(at)fconet.fco.gov.uk

High commission.

Honorary Consulate of Austria

Safura Tower, 5th Floor
20 Kemal Ataturk Avenue
Dhaka 1213

Tel: +880 2 989 4329
Fax: +880 2 989 0836
E-mail: austriancon(at)quasemgroup.com / tasvir(at)quasemgroup.com

Honorary consulate.

 

Country Profile Sources

General Information Sources

Corruption Levels Sources

Judicial System

Police

Licences, Infrastructure and Public Utilities

Land Administration

Tax Administration

Customs Administration

Public Procurement and Contracting

Environment, Natural Resources and Extractive Industry

  • Global Integrity: Bangladesh Country Report 2010.
  • Bangladesh Today: 'SC stays bail of ex-forest boss Gani', 13 March 2009.
  • Transparency International: Global Corruption Report 2008.
  • The New Nation: 'Secrets of Chief Conservator becoming multimillionaire', 1 June 2007.
  • The Daily Star: 'Gani's shenanigans', 1 June 2007.
  • Illegal-logging.info: 'Depletion of forests by the forest lord! Indiscriminate exploitation must stop', 8 June 2007.

Public Anti-Corruption Initiatives Sources

Private Anti-Corruption Initiatives Sources