Norway

Researcher + Peer Reviewer3857: Non-real estate asset disposal is conducted by the Armed Forces, which sells or destroys assets, including through the Norwegian Defence Logistics Organisation. Items for auction are listed publicly through Norwegian Mediation and Auctions. Meanwhile, the Norwegian Defence Estates Agency (NDEA), which works under the direction of the Ministry of Defence, is tasked with disposing of real estate assets. Sales and upcoming sales are published on their website. In terms of oversight, the entirety of the MoD is audited regularly, while audits of more specific components such as asset disposal are conducted on a more ad hoc basis, with the 2005 report being more focused on the entirety of the asset disposal process (2).

A score of 2 has been selected here due to the lack of detailed information on asset disposal processes available to the public, as well as information on the proceeds of the disposals and details other than auction information. There is a lack of information on MoD follow-up of a report by the Auditor General in 2005 and further NDEA efforts to improve internal controls since 2011, at least with regard to asset disposal.

A further factor is the Økokrim 2015 investigation into the Norwegian Defence Logistics Organisation on the basis of sales of ten former Norwegian naval vessels to private paramilitary clients in Nigeria in contravention of export policy on military goods. The Pricewaterhouse Coopers audit that brought this to light in 2014 also raised serious questions with regard to errors and contravention of rules and regulations at the Defence Logistics Organisation. (4,5)

Researcher + Peer Reviewer3857: The Office of the Auditor General audits asset disposals as part of its independent audit of the Ministry of Defence. However, this is only alluded to summarily in the public report (without providing detailed data that audits are based on). (1) There is a lack of information on MoD follow-up of a report by the Auditor General in 2005 (2) and further NDEA efforts to improve internal control since 2011, at least with regard to asset disposal.

A contracted Pricewaterhouse Coopers audit uncovered irregularities that led to the Økokrim 2015 investigation into the Norwegian Defence Logistics Organisation on the basis of sales of ten former Norwegian naval vessels to private paramilitary clients in Nigeria in contravention of export policy on military goods. (3, 4) This audit is not publicly available, however, suggesting that while there is internal scrutiny, the results of these investigations are not always released.

Researcher + Peer Reviewer3857: The State Budget for 2015 allots the Norwegian Intelligence Service, the Norwegian Police Security Service and the National Security Authority a total of approximately 2 billion NOK out of a defence expenditure of 44 billion NOK together with a justice expenditure of 33 billion NOK (secret spending comes out of both budgets, secret budget expenditure of 2.5%). Of this, the largest item was the Intelligence Service budget of 1.2 billion NOK. 2 billion NOK of intelligence expenditure constitutes 4.5% of the defence budget.

Researcher + Peer Reviewer3857: There is no publicly available information on the issue; in the absence of information, overarching legal provision regarding financial oversight have been applied and confirmation has been sought from government representatives. The 2013 Government Defence Anti-Corruption Index provides information obtained from an interview, which remains accurate as far as could be verified. Score 3 reflects lack of publicly available information on the issue.

Para 43 of the parliamentary rules of procedure states that the national budget is presented to Parliament within six days after Parliament's opening. Various parts of the budget are distributed to the committees to be considered. Secret items do not have their own separate parliamentary procedures, so according to existing laws which apply to the defence sector, these are also considered by the Defence and Foreign Affairs Committee and the Justice Committee. The overall budget is reviewed by the Finance Committee, and voted on as a whole by the Parliament. The parliamentary Committee for the Monitoring of Intelligence, Surveillance and Security Services focuses on the protection of civil rights and does not play a part in scrutinising secret budgets.

Government representatives have confirmed that the Parliament’s Standing Committee on Foreign Affairs and Defence is briefed on foreign intelligence issues, and members of the Standing Committee on Scrutiny and Constitutional Affairs are invited to participate in these briefings. Annual, in-depth briefings on NIS activities and budgets are given to the President of the Storting and the Chair and Vice-Chairs of the Committee on Foreign Affairs and Defence. (3) In interviews carried out for the previous Defence Anti-Corruption Index, parliamentary employees stated that three members of the Foreign and Defence Committee are given full insight into the budget including classified items. These are the chairman, the first vice chairman, and the second vice chairman. The rest of the committee may be informed about classified items. (1) This supports information obtained through research for this edition and appears to confirm its validity, and supports the conclusion that the key members of parliament exercising oversight over defence politics are provided with relevant information.

Score 3 has been selected to reflect lack of publicly available information on the issue.

Researcher + Peer Reviewer3857: The Norwegian Intelligence Service is administrated under the Ministry of Defence, and its budget is therefore included in the State budget. Its accounts and procurement are audited by the Office of the Auditor General. According to parliamentary employees interviewed (1), audit reports are reviewed by the Standing Committee on Scrutiny and Constitutional Affairs, but they are not made publicly available.

Government representatives have confirmed that the Norwegian Intelligence Service (NIS) is audited by selected personnel from the Office of the Auditor General of Norway, who are given security clearances. The Parliament’s Standing Committee on Foreign Affairs and Defence is briefed on foreign intelligence issues, and members of the Standing Committee on Scrutiny and Constitutional Affairs are invited to participate in these briefings. Annual, in-depth briefings on NIS activities and budgets are given to the President of the Storting and the Chair and Vice-Chairs of the Committee on Foreign Affairs and Defence.
Additionally, the Norwegian Parliamentary Intelligence Oversight Committee (EOS-utvalget) provides an additional layer of oversight focusing on human rights issues. This Committee receives full access to NIS materials, conducts on-site inspections, and reports to the Presidium of the Storting. (4) Interviews with parliamentary employees carried out for the previous Defence Anti-Corruption Index stated that &quoute;Three members of the Foreign and Defence Committee are given full insight into the budget including classified items. These are the chairman, the first vice chairman, and the second vice chairman. The rest of the committee may be informed on classified items. Annual accounts are public according to the law with the exception of classified items. The defence sector budgets are debated but there are no indications that classified items (secret budgets, programs, reports) are debated outside a smaller group.&quoute; (3) This supports information obtained through research for this edition and appears to confirm its validity.

Researcher + Peer Reviewer3857: There is no allowance for or mention of off-budget military expenditure in Norwegian constitutional or budgetary law. According to parliamentary employees interviewed, all expenditure is contained within the State Budget. However, strictly speaking, expenditures which are not part of the budget are permitted, but only in cases where the funds are separately allocated by Parliament - a process similar to that of agreeing the budget. (3) This was the case with, for example, acquisition of the F-35 aircraft by the Norwegian Air Force, when funds were separately authorised by Parliament. (4) Therefore, given the scrutiny accompanying the process, score 4 is maintained as these expenditures do not seem to constitute a gateway to greater corruption risk and should not be treated as off-budget.

Researcher + Peer Reviewer3857: As concluded in Q27, additional expenditure is allocated by Parliament and does not constitute off-budget spending. Interviews and audits of the Office of the Auditor General confirm that all spending is recorded.

Researcher + Peer Reviewer3857: The Freedom of Information Act allows for classification of information on the grounds of national security and denies access to confidential information.(1) The classification regime is set out by the Security Law.(2) As per the Security Law of 1998, the Norwegian National Security Authority applies classification, authorises other entities to handle classified information and provides regulations on classification. The NSM is under the supervision of the MoD, reporting to the Ministry of Justice on civilian matters and to the MoD on security matters.

The law stipulates that classification must ensure that information is marked with the appropriate security level. Security grading should not happen to a greater extent than is strictly necessary, and information should not be given a higher security level than is necessary. Security Grading should not be in effect for longer than is strictly necessary, with a maximum of 30 years, after which the information is declassified.

There is no evidence of individuals or agencies influencing decisions, outside of the command chain and prescribed processes; nor is there evidence implying that scrutiny over these mechanisms is compromised. Refusals to make information available (including where defence issues are involved) can be appealed to the Parliamentary Ombudsman (4), and the Open Government Partnership has concluded that Norway's commitment to availability of information was high. (5)

Researcher + Peer Reviewer3857: The Ministry of Defence owns 100% of Aerospace Industrial Maintenance Norway, a state-owned enterprise, and publishes information, including financial details, on its operations. Its profit in 2012 was 14.7m NOK, and its operating income was 528m NOK, making it worth less than 1% of the Norwegian defence budget. Its corporate social responsibility documents include an obligation to an annual audit and are in line with other state-owned enterprises.

Researcher + Peer Reviewer3857: Aerospace Industrial Maintenance Norway SF is audited by the independent Office of the Auditor General, which audits to the standard of the International Organisation of Supreme Audit Organisations. However, the details of this audit are not published - other than the information that the audit has been conducted.

Researcher + Peer Reviewer3857: Økokrim, the economic crimes division of the police, arrested a former employee of the Norwegian Defence Logistics Organisation in 2015 on suspicion of receiving 150 000 NOK in two currency transfers in connection with the sale of six demilitarised Norwegian naval vessels in 2012 while still in employment. This led to the discovery of irregularities in the disposal of a coastal fort and the illegal acquisition of a quad bike, a motorboat and luxury mattresses by the same employee. The Norwegian newspaper Dagbladet criticised the government not reporting the later revelations to Økokrim quickly enough.

The relevant Code of Conduct states that employees of the Norwegian Armed Forces may not take extra jobs, second jobs, board jobs, or other paid work that are incompatible with the employer's legitimate interests or liable to weaken trust in public administration. The Code of Conduct states the employer will judge what sanctions will be taken if an employee contravenes these rules.

Researcher + Peer Reviewer3857: The keynote speech of the Norwegian Minister of Defence at the NATO Building Integrity conference in June 2015 stresses the country's commitment to integrity and anti-corruption measures in defence, as well as to tackling corruption as a threat to international security. (6) The establishment of (in 2012) and commitment to the Centre for Integrity in the Defence Sector (CIDS) is a further example of the commitment. CIDS' mission is to &quoute;promote good governance and professional integrity in the defence sector&quoute;; it works in cooperation with Transparency International UK and has a special interest in the NATO Building Integrity self-assessment and peer review process. Norway remains one of the lead nations in the BI programme and contributes to its trust fund.

However, no statements on integrity and anti-corruption from Norway's high-ranking military officers could be located.

Researcher + Peer Reviewer3857: The Civil Servants Act prohibits civil servants (including defence officials) from receiving gifts that they are forbidden to receive by regulations and prescribes disciplinary measures, suspension or dismissal of officials. In addition, it allows for prosecution after dismissal.

Procurement Regulations for the Armed Forces and Guidelines for the Civil Service, Section 20 of the Civil Servants Act, the Disciplinary Act and §276a-c of the Norwegian Penal Code, also provides for punishment through either fines or a prison term for various forms of corruption. The Penal Code §388 prescribes a punishment of up to 10 years imprisonment for gross corruption, which can be distinguished from other crimes of corruption, amongst other things, by being carried out by a public official. The State Personnel Handbook 2015 provides guidelines for dealing with corruption by civil servants.

Defence employees have been arrested and charged with these offences, for example in the Siemens scandal and the Nigerian vessel sales scandal. There is public criticism that the Ministry of Defence has not responded with appropriate speed or seriousness to events that have given rise to the current police investigation into the sale of demilitarised naval vessels to Nigerian paramilitaries. It has also failed to respond to concerns regarding the Rheinmetall Man procurement scandal, involving a company whose predecessor had previously been convicted of corruption in Germany.

Researcher + Peer Reviewer3857: The right to become a whistleblower is codified in the Working Environment Act 2005, which applies to all employees, including those in the defence sector but with the exception of military aviation. The Act also obligates employers to develop routines for internal whistleblowing and prohibits them from retaliating against the whistleblower. (1) Subsequent legislation exempting civil servants from other passages of the WEA does not exempt them from whistleblowing legislation.(2)

MOD whistleblowing channels include a telephone hotline, an e-mail address, mail or reporting in person. Contact information is publicly available on all relevant Internet and Intranet sites, and the MOD provides a website describing the whistleblowers' right to protection and the process. There is also an online portal enabling members of the public to submit alerts. Should an employee not want to contact the concerned agency directly, notification can also be made to the Labour Inspection, Equality Ombudsman, Auditor General, or the police. (7, 8)

Score 2 has been selected in this instance because of evidence of an occasion on which the MoD did not protect whistleblowers since the last TI defence assessment was performed. In 2013, there was criticism that the then Minister of Defence, Anne-Grete Strøm-Erichsen, had not responded in a timely fashion to whistleblowers' claims that threats and intimidation were being used against the marine unit Marinejegerkommandoen in a debate on merging of forces, and that the Ministry had made names of the whistleblowers public, which could be interpreted as a violation of the WEA and/or the Public Data Act. (3-5)

Researcher + Peer Reviewer3857: Most positions in the military require a security clearance. The Procurements Regulations for Defence state that special attention ought to be paid to sellers who for the past two years have been employed within the armed forces.

Furthermore, it states that there might be reasons to prevent personnel from working on certain procurement deals when the seller and the government employee might have personal affiliations and where impartiality cannot be guaranteed.

However, there is no evidence of a comprehensive process that would identify sensitive positions, analyse corruption risks associated with them, and apply specific solutions.

Researcher + Peer Reviewer3857: Detailed information on personnel statistics are given by the Armed Forces in the Personnel Report, most recently released in 2014. (1) This includes numbers of civilian and military personnel. Statistics are also given on an annual basis on the Armed Forces website. (2-3)

Researcher + Peer Reviewer3857: Pay rates and allowances for civilian and military personnel in the Armed Forces are published by the Norwegian Military Officers' Association. The information is comprehensive, detailing full pay scales and available allowances.

Researcher + Peer Reviewer3857: There is no evidence to suggest that payments are not made in a timely fashion; basic pay rates are published and non-discretionary. In December 2013, the Office of the Auditor General raised concerns that in a significant proportion taken from a random sample, overtime was being paid in excess, in error or without the appropriate documentation. (1) There is no further information published on the payments system, however. Bonuses are paid, although only those for the Home Guard are published. (2)

Score 3 has been selected to reflect shortcomings regarding the transparency and payment of overtime and bonuses.

Researcher + Peer Reviewer3857: Brief job descriptions for senior employees are available on the website, but the full job descriptions or assessment processes attached to the roles are not available; neither are there any available details on the appointments system.

There were allegations of appointment not being based purely on merit when former General Chief of Defence Harald Sunde recommended Karl Egil Hanevik for the post of Commander for the Special Forces, a post that he was subsequently appointed to in 2011. Sunde had been the best man at Hanevik's wedding in 1994. (2) Critics alleged that Sunde contravened The Public Administration Act §6 by not excusing himself as unfit to make the recommendation based on &quoute;special circumstances likely to undermine impartiality&quoute;. However, Sunde responded that he did not consider himself to be unfit to make the recommendation and that his relationship with Hanevik was primarily a professional one. No evidence of impropriety was found.

RESPONSE TO GOVERNMENT REVIEWER: Transparency on the level of announcements is acknowledged.

Researcher + Peer Reviewer3857: Requirements for promotion of lower ranks of personnel are given in the Military Personnel Handbook. There are also processes based on objective criteria for middle and higher ranks, although information on this for higher ranks is less available. Middle-rank appointments are decided by both the employer and labour unions, while higher-rank appointments are decided by the employer, with labour unions giving their opinion.

The promotion scheme is regulated by the Officer System of the Armed Forces. Until now, this has varied across parts of the Armed Forces, as Norway remains the only NATO force to have a unit command system. As of May 2015, the MoD is consulting on a unified officer system that would provide better clarity and transparency, as well as predictability and long-term career development in the promotions process (2).

Currently, there are no public sources implying that the promotions system is affected by any conflicts of interest or vulnerable to influences from outside the decision-making chain.

Researcher + Peer Reviewer3857: Norway has compulsory conscription. The Military Service Law §49 proscribes imprisonment from three months to two years for seeking to evade conscription in the military (this would include attempting to provide bribes in return for a waiver) or to obtain undue advantage thereto.

The Penal Code §388 proscribes a punishment of up to 10 years imprisonment for gross corruption, which can be distinguished from other crimes of corruption by, among other things, being carried out by a public official. The State Personnel Handbook 2015 provides guidelines for dealing with corruption by civil servants.

There is no current publicly available evidence suggesting that bribery does occur in conscription situations.

Researcher + Peer Reviewer3857: Norway has compulsory conscription. The Military Service Law §49 proscribes imprisonment from three months to two years for seeking to evade conscription in the military or to obtain undue advantage thereto, which could include attempting to obtain a preferred posting. The Penal Code §388 proscribes a sanction of up to 10 years imprisonment for gross corruption, which can be distinguished from other crimes of corruption by, among other things, being carried out by a public official. The State Personnel Handbook 2015 provides guidelines for dealing with corruption by civil servants.

There is no evidence suggesting that conscripts have attempted to bribe their way into preferred postings.

Researcher + Peer Reviewer3857: There is no evidence of ghost soldiers within the Norwegian armed forces. Numbers of military personnel are made public and the defence sector is audited by an independent Office of the Auditor General. Lack of evidence indicating shortcomings in timely payments and separate chains of command and payment (please see Q40 and Q46) also indicate very low likelihood that this phenomenon exists.

Researcher + Peer Reviewer3857: Armed Forces payment is managed by the Department of Payroll Administration, which is separate from operational departments. In the Ministry, payroll is managed by the Department of Development and Administration. Chains of command are kept strictly separate from chains of payment within the organisational structure.

Researcher + Peer Reviewer3857: The &quoute;Ethical guidelines for contact with business and industry in the defence sector&quoute; cover bribery, gifts and hospitality and conflicts of interest in contact between defence and industry, including military and civilian personnel, in detail. A separate document, &quoute;Core Values of Norway's Defence Sector&quoute; broadly outlines ethical values. Together, these documents serve as equivalent to a Code of Conduct and are both available to the public. The Armed Forces and the the Norwegian Defence Estates Agency have published their own statements about ethical conduct (3,4).

The application of the Code can be overseen in an administrative manner - the Code details career-related consequences of breaches - or by way of criminal sanctions if a breach is also an offence. This provides an oversight mechanism.

Researcher + Peer Reviewer3857: The &quoute;Ethical guidelines for contact with business and industry in the defence sector&quoute; were introduced in 2011 after the Siemens bribery scandal. As it is a guidelines document, an event of corruption would be a breach of the laws described in the document, and would most likely be prosecuted under the Penal Code. (1)

However, the document also explains potential career consequences and disciplinary actions under the Civil Servants Act, as well as the factors that go into deciding how a case will be dealt with. (1) Results of prosecutions are made available to the press upon request. (2)

A recent example involves the employee of the Norwegian Defence Logistics Organisation, who was charged with corruption in April 2015 in connection with the corruption in the sales of vessels to Nigerian paramilitaries. (3)

Score 3 has been selected as publication of the results of prosecution are not made public proactively.

Researcher + Peer Reviewer3857: The 2009-12 Action Plan (2) identified 'knowledge and competence building' as one of its four main pillars. Since the 'target group' for the plan is described as the 20,000 employees and leaders in the Norwegian defence sector, it can be inferred that some form of training is applicable to all (pp6-7). The Plan further states that all leaders and employees should possess the knowledge enabling them to make correct decisions, and suggests that ethical training could be incorporated into existing fora such as courses and seminars (p11).

This has been confirmed within the vignette for an e-learning course and by the Norwegian government: all employees, particularly new ones, receive anti-corruption and leadership training, including an online course and a mandatory classroom session exploring leadership and ethical issues. (1, 4) The e-learning course on attitudes, ethics and leadership is compulsory for all personnel, covering five modules: business contacts, whistleblowing, leadership restructuring, bullying and collegial attitudes and cultural differences and diversity. (1) CIDS also continues to provide other courses on integrity building (3).

Defence sector employees are invited to a one-day seminar on topics related to attitudes, ethics and leadership; however, there is no requirement regarding the training being repeated at regular intervals or annually. (4) Score 3 has been selected to reflect training being given to all employees and combined with an opportunity to refresh it, but stopping short of a requirement for follow-up training occurring at least annually.

Researcher + Peer Reviewer3857: It is policy for the names of persons tried and the outcomes of their trials to be made accessible to journalists upon request. It is at the discretion of journalists as to whether they choose to publish the names, however.

There are recent examples of such details being made public. In April 2015, a Norwegian Defence Logistics Organisation employee was charged with corruption. In August 2015, the newspaper Dagbladet criticised the government for a delay in reporting further alleged corrupt activities by the employee to the police. The government countered that it wanted to wait until it was sure of the allegations. Additionally, in 2007, charges of corruption were brought against eight defence services personnel in the Siemens case, of which four cases were dropped and four were acquitted.

Researcher + Peer Reviewer3857: The Penal Code lists imprisonment as the punishment for corruption and gross corruption (§ 387 - 388). While it does not explicitly mention facilitation payments, its provisions have been construed as forbidding them, as long as the facilitation payment can be construed to aim at creating improper advantage. If this is the case, criminal sanctions apply. (4)

This interpretation was reinforced in a 2008 pamphlet issued by the Norwegian Ministry of Foreign Affairs, confirming that facilitation payments were considered a form of corruption and thus prohibited. (5)

The State Personnel Handbook 2015 10.19 gives guidelines for handling cases of corruption in the public sector. The Ethical Guidelines for Business and Industry in the Defence Sector make it clear that accepting gifts and hospitality, with the exception of gifts of negligible value or moderate dinners, is not acceptable conduct.

No evidence of the sanctions being either applied or not applied in justified cases was found.

Researcher + Peer Reviewer3857: The new Joint Military Doctrine updated in 2014 includes guidance for commanders highlighting that, especially for missions in places characterised by weak state structures and a fragile civil society, it is important that military forces are demonstratively orderly in their interaction both with representatives of the state, private operators and other persons in authority other than the state (for example, clan and ethnic leaders).

The doctrine states that collaboration with stakeholders in the area of ​​operation requires a clear ethical framework, as well as cultural and social understanding. It advises that the force should take care not to undermine its own operations by being used in local power struggles or be dragged into corruption. There is no detail given in the doctrine beyond this.

Researcher + Peer Reviewer3857: There is evidence of some training on issues of corruption on operations. The Norwegian Ministry of Defence enacted the Action Plan on Attitudes, Ethics and Leadership 2009-2012, which included leadership, ethical and dilemma training. The Action Plan points to operations as one of its three 'areas of impact' (p7) and stresses integrating of ethical issues into operations training, as well as sharing lessons identified between units (p6). The Plan also states that senior personnel have participated in training and discussion forums, but does not specify whether this includes all commanders or whether commanders are tested on their understanding of the issues.

The Centre for Integrity in the Defence Sector has also delivered a seminar on the Building Integrity programme. CIDS also delivers a mandatory course on ethics and leadership for all new defence sector employees. (5) However, the five modules comprising this course do not include a module on the significance of corruption as a strategic issue on military operations.

Score 2 being selected does not reflect existence of cases of corruption being mishandled by commanders, as there is no evidence of such cases. However, it is not possible to ascertain that all commanders receive relevant training (i.e. tailored to operational conditions) and that they apply this knowledge in the field: while corruption has been recognised as a strategic issue in, for example, Norwegian-Afghan relations, as well as a reason why aid was cut (3), the Norwegian plan for Faryab province in Afghanistan does not mention corruption explicitly. (4) It is also not known whether training is detailed and comprehensive.

Researcher + Peer Reviewer3857: The Action Plan on Attitudes, Ethics and Leadership does place emphasis on ethics in training for international operations, but Norway does not deploy specialist personnel for corruption monitoring in defence operations.

The Norwegian government does have a good general understanding of the high risks of corruption in Afghanistan, where the Army is currently deployed. This awareness is primarily focussed on the risks external to the mission and how Norwegian financial aid could fall prey to corruption.

RESPONSE TO TI REVIEWER: Agree. Score 0 selected.

Researcher + Peer Reviewer3857: The Norwegian MoD's Action Plan describes interaction with private actors as one of the fields that training and decision-making need to encompass (1). Training for international operations includes issues such as rules of engagement, humanitarian law, and codes of conduct (1, p9). Government representatives have confirmed that overall procurement regulations apply to contracting on operations as well, and that staff are trained in operational contracting as part of regular education programmes. (2)

Score 2 has been selected to reflect uncertainty re. now detailed and tailored to the operational context the guidelines are, as well as little public information on specific training programmes.

Researcher + Peer Reviewer3857: Private military contractors are employed principally to deliver training to the Norwegian Armed Forces and they are overall not frequently used.

In the event of corruption involving a PMC, the Norwegian penal code Art. 276a-c would apply: any PMC found guilty of corruption would no longer be able to deliver services to the Ministry of Defence. So far, no cases have emerged to test this.

Norway is signatory to the Montreux Document and the International Code of Conduct for Private Security Service Providers (ICoC), both of which lay out good practices and guidelines when it comes to employing PMCs. The Document stipulates that PMCs should be subject to the criminal laws of the country contracting them and the country on whose territory they are registered and operate. It stipulates that when hiring a PMC, the state employer should ensure that the PMC has not been involved in organised crime, bribery, and corruption, and that its staff are properly trained, which includes anti-corruption training. The Document further encourages employing states to ensure that PMCs have policies against corruption. (3)However, the provisions of the Document are not legally binding, although the International Code of Conduct Association assesses PMCs' suitability to join the Code and audits their performance. (4) It is, however, unclear to what extent this is effective, particularly as standards are still being formulated. (5) According to correspondence with government representatives (3), standards applying to contractors would be equivalent to those applied to the armed forces.

Researcher + Peer Reviewer3857: Legislation covering defence and security procurement is well-established, but was revised, taking effect in 2014, in accordance with the European Economic Area Agreement on Public Procurement, particularly with regard to Article 123 on the exemption of procurements from the agreement due to essential security interests. Defence and security procurement is broadly divided into three categories: procurement that may be exempted under Article 123 is regulated by the Defence Acquisition Regulations, defence and security procurement that cannot be exempted is regulated by the Regulations on Defence and Security Procurement, and all other procurement processes are regulated by the Public Procurement Act and Regulations.

The Public Procurement Regulations and the Regulations on Defence and Security Procurement both contain anti-corruption provisions: they stipulate that offers from companies convicted of corruption shall be rejected. Under the Defence Acquisition Regulations, it is stated that defence sector employees who commit corruption are subject to Article 276 a-c of the Penal Code (§2.13) and that defence sector employees have, as in the Working Environment Act §2.4, the right to report corrupt activities (§2.18). It also commits the defence sector to take measures to prevent corruption (§3.2).

Researcher + Peer Reviewer3857: The procurement cycle methodology and project management is disclosed on the Armed Forces &quoute;Prinsix&quoute; website, which summarises how the military conducts its investments. (1, 2)

While detail on some aspects of the process (for example asset disposals) might not be available, the entirety of the process and how it is conducted is publicly available.

Researcher + Peer Reviewer3857: According to an industry representative, there is internal auditing of defence procurements and external auditing by the Office of the Auditor General. Internal auditing is used as a management tool in the MoD and its results are not published, whereas the summaries of the OAG's independent external audits are made public. The Standing Committee for Scrutiny and Constitutional Affairs is responsible for reviewing reports from the Office of the Auditor General in the Parliament. All audits span changes in governments and politics.

In October 2014, the OAG identified serious problems that had been previously raised and which it felt had not been acted upon. In particular, this included inadequate financial management and internal control over the Air Force's purchases of training and education for simulator training abroad, violations of public procurement regulations regarding illegal direct purchases from suppliers over a period of 15 years, and security issues with the SAP system for accounting, payroll and material management, specifically missing routines and an excess of admin users.

In its audits, the OAG does evaluate whether previous findings have been taken into account. A review of OAG reports about the MoD reveals that government responsiveness to OAG findings is seen by the OAG to be mixed. (2)

Researcher + Peer Reviewer3857: The government publishes &quoute;Future Acquisitions in the Norwegian Armed Forces&quoute;, detailing potential defence purchases in the next 5 to 10 years. This was last published in March 2014 with a publication planned for 2015.

Tenders below 500 000 NOK are published openly on the Doffin database for public procurement and above 500 000 NOK on the EU Tenders Electronic Daily website. However, the extent of audit verification of the data (and whether all items that should be disclosed, are) is unclear.

Researcher + Peer Reviewer3857: Companies bidding for defence work are required to state if they, their employees, or others associated with the business have been convicted of corruption. Para 3-2 of the Procurement Regulations for the Defence Sector also requires that for contracts above a certain value, companies need to put in place corruption prevention measures such as internal control, ethical guidelines, and/or internal reporting channels.

Provision 1.9.2.5 of the Procurement Regulations for the Defence Sector also prohibits the defence sector from contracting companies that are guilty of criminal offences or serious misconduct against professional and ethical standards. Other requirements for bidders are listed in Chapter 36 of the regulations, which detail the need for financial solvency, etc.

Researcher + Peer Reviewer3857: The Norwegian Armed Forces prepare concept papers for long-term planning and investment available online, and clearly link this to investment management and procurement within an established methodology. The methodology linking each part of the procurement process is available on the Prinsix website, and the entire process is subject to government audits, although there have been criticisms on that front.

The government also published a report on building a strategic relationship with industry partners in the defence sector. The last criticism that the OAG published on planning was in 2011, when it criticised inefficient management and planning, and strategy changes resulting in unexpected costs; this was not related to corruption, however. Beyond this example, there is no evidence to suggest that procurement which is external or superfluous to this needs-based national strategy occurs.

Researcher + Peer Reviewer3857: The Armed Forces Prinsix website clearly defines the methodology for the procurement cycle and for identifying the requirements. This also includes resource planning, which is used to established the appropriate type and quantity of a procurement to be able to conduct an activity. As discussed in Q62, there is no evidence to suggest that procurement happens outside of this national strategy methodology. Future purchases are published in advance in a prospectus.

Researcher + Peer Reviewer3857: The Defence Acquisition Regulations (ARF) state that procurement should be carried out as far as possible on the basis of open competition: paragraph 1-4 in the ARF state any procurement will follow the General Procurement Directive or the Defence and Security Procurement Directive (FOSA) which means full and open competition. It also gives conditions under which procurement processes can be exempted from open competition, e.g. when only one supplier can meet the procurement needs, if a rapid procurement is required due to unforeseen needs, or if essential national security reasons justify deviations from the procedure (this is in accordance with EEA procedures). The Public Procurement Regulations have equivalent rules on open competition and single sourcing. Exceptions need to be justified by the contracting authority. (2,3)

It is not known what proportion of procurements are single-sourced. However, in 2011 the Office of the Auditor General has found that of a sample of 98 procurements audited, 60 had been single-sourced, and of these only nine had the required documentation to be justified as single-source. While this report was detailed, it is important to note that such close scrutiny does not occur regularly: while general reports are published regularly, this report is an example of occasional and irregular OAG reports which make public details surrounding particular aspects of governance. (1)


RESPONSE TO GOVERNMENT REVIEWER: Score changed to 1 following your suggestion and to reflect the principle of open competition in legislation and available evidence suggesting that around 2/3 of procurement tends to be single-sourced (it was not possible to conclusively verify this number).

RESPONSE TO TI REVIEWER: Agree. Score changed to 1 and information incorporated.

Researcher + Peer Reviewer3857: Procurement regulations stipulate that procurement should be competitive, except for pre-defined exemptions.Tender boards are used in competitive procurement.

Procurement decisions can be audited by the Office of the Auditor General if deemed necessary (eg. as part of a sample). The results of the audits are published and seen as independent.

The primary mechanism for checking the decisions of tender boards appears to be the activity of the Complaints Board for Public Procurement following a complaint by a party to the procurement process, although the Board only gives advisory opinions that are not enforceable by law. Tender boards, as all parts of procurement, are bound by the Defence Acquisition Regulations and the Public Procurement Regulations, as well as Ethical Guidelines for Contact with Business and Industry in the Defence Sector, all of which are openly published.

Score 3 was selected as regularity of audits could not be established.

Researcher + Peer Reviewer3857: The Competition Law prohibits collusion and agreements between parties to hinder competition, punishable by fines or imprisonment of up to three years. This is extended to up to six years for particularly serious cases. (2, 4) The Penal Code provides for companies, as well as individuals, to be criminally liable (3, 4). It also proscribes punishments for corruption for individuals (Article 276 a-c of the Penal Code (§2.13).

Provision 1.9.2.5 of the Procurement Regulations for the Defence Sector prohibits the defence sector from contracting companies that have been found guilty of criminal offences or serious misconduct against professional and ethical standards (which includes collusion). Other requirements for bidders are listed in Chapter 36 of the regulations, which detail the need for financial solvency, etc.

The Norwegian Competition Authority has issued a checklist to help public procurement managers prevent and recognise collusion in bidding processes. (1) There is no evidence of cases of collusion, or suspected collusion within the defence sector; there is, however, evidence of sanctions being applied in another sector. (6)

Researcher + Peer Reviewer3857: Training, comprising both e-learning and in-person seminars, is mandatory for project managers. Although it is not mandatory to take the exams that follow training, the title of &quoute;Project Manager in the Military&quoute; can only be earned by successfully passing the course exams. This covers the cycle of the Prinsix project management system including operational management of the project after the contract has been signed, and ensuring that defence contractors meet obligations on reporting and delivery. This is managed principally by the Norwegian Defence Logistics Organisation, who are the project managers at the acquisition stage.

There is no evidence to suggest that the department is under-resourced; nor is there any suggestion of undue influence on this issue from higher grades within the organisation. No recent reports of specific shortcomings have been identified.

Researcher + Peer Reviewer3857: After a bidder has been notified of the award of a contract, there is a mandatory waiting period until the contract can be signed, in order to give other bidders the opportunity to appeal the decision. If a contractor decides to appeal, the award process is automatically temporarily suspended until a court decides that there are insufficient grounds to further suspend the procurement. This change was transposed into Norwegian law from EU Directive 2007/66/EC.

Complaints can be made to the Complaints Board for Public Procurement, which investigates the complaint, makes a conclusion and publishes the conclusion on its website. This conclusion is an advisory opinion and not legally binding. As of May 2015, the Complaints Board has one complaint open against the Norwegian Defence Logistics Organisation with regard to an illegal single source procurement of military vehicles. In 2015, the Complaints Board resolved 4 cases against the Norwegian Defence Estates Agency, two of which were thrown out and two of which were found not to have constituted a breach of procurement rules. In 2014, it resolved two cases against the Norwegian Defence Logistics Organisation, one of which it was cleared of, and in the other case was found to have provided conflicting information in the tender. It resolved a further case against the Norwegian Defence Estate Agents, who it found to have provided documents not suitable for a tender. Civil cases may also be tried before courts of law.

Non-discrimination is a principle of Norwegian public procurement. There is no explicit reference to non-discrimination against suppliers who have made complaints, but the Defence Acquisition Regulations require procurement decisions to be based on non-discriminatory criteria as much as possible. No evidence of discrimination against companies based on past complaints has been found.

Researcher + Peer Reviewer3857: The Norwegian Penal Code applies a sentence of a fine or imprisonment for corruption and gross corruption. A company found guilty of corruption can no longer bid for government work, according to procurement regulations: provision 1.9.2.5 of the Procurement Regulations for the Defence Sector prohibits the defence sector from contracting companies that have been found guilty of criminal offences or serious misconduct against professional and ethical standards. Other requirements for bidders are listed in Chapter 36 of the regulations, which detail the need for financial solvency, etc.

The Ministry of Defence has been criticised for opening a procurement with Rheinmetall Man, which could be perceived to be a successor of a company that had been recently found guilty of corruption outside of Norway. While it appears that there were doubts as to the continuity between the enterprise bidding for contracts and that convicted of corruption, the case suggests that the regulations might need to be made more robust. (2, 3)

Researcher + Peer Reviewer3857: Offsets are administered under Industry Partnerships or Repurchase by the Ministry of Defence. They are regulated by Chapter 42 of the Defence Acquisition Regulations and the Regulations on Industrial Cooperation Related to Defence Acquisition from Abroad.

Although these do impose an obligation to report on an annual basis, they do not impose any requirements regarding due diligence or auditing, which suggests that their effectiveness is limited.

RESPONSE TO GOVERNMENT REVIEWER: The offset documents do not impose any due diligence or auditing requirements - which is not to say that due diligence or auditing does not take place on a case-by-case basis. However, this could not be verified. However, score 1 was selected to reflect the influence of general contract law on offset contracts.

Researcher + Peer Reviewer3857: The Regulations on Industrial Co-operation Related to Defence Acquisition from Abroad stipulate that Industrial Cooperation Agreements are exempted from public disclosure. However, the value of the agreement, remaining obligations and supplier's name can be published. This is published in a regularly-updated list on the internet by the Armed Forces.

This is in conformity with the regulations on offsets, which state that as a rule, they are exempted form public disclosure in accordance with the Public Information Act but the value of the agreement, the remaining obligations, and supplier’s name are normally regarded as information subject to public disclosure.

Researcher + Peer Reviewer3857: The regulations detailing the procedure for offset procurement do not include any explicit rules on competitive processes. Norway subscribes to the European Defence Agency Code of Conduct on Offsets, which, while not binding, aims to reduce the use of offsets and states that &quoute;When used as a criterion for tenderer selection or award of contract, offsets will be considered of a less significant weight (or used as a subsidiary criteria in case of offers with the same weight)&quoute;.

In the Guidelines for Establishing and Implementing Offset in connection with Procurement of Defence Material from Foreign Suppliers, whether or not a competitive industry already exists in Norway is considered in whether or not to implement the offset. If direct industrial cooperation takes place, the regulations state that the Norwegian company must be competitive in order for the offset to be approved.

Researcher + Peer Reviewer3857: The use of agents and intermediaries by companies in the procurement cycle is common: local agents set up meetings with defence procurement staff, provide information and support the bidding process (Interview with Source 3). However, the Defence Acquisition Regulations, para 36-3, state that the defence sector should not contract with agents. There is no evidence of further controls and given the use of agents is common in defence procurement, this does not appear to be enforced.

Researcher + Peer Reviewer3857: The Defence Acquisition Regulations are subject to the Freedom of Information Act, so individuals may request and receive information on details of procurement actions with the exception of information that is confidential for business reasons. According to an interview source, information is never released prior to the contract being signed, as per normal procedure in procurement contract negotiations.

Researcher + Peer Reviewer3857: The Defence Acquisition Regulations do not state that the contractor should adopt anti-corruption programmes. The Ethical Statement for Suppliers to the Royal Norwegian Ministry of Defence does not require this either. The Ethical Statement, however, does stipulate that the contractor should confirm that persons associated with it have not been convicted of corruption.

RESPONSE TO GOVERNMENT REVIEWER: Para 3.1 does not appear to specifically address corruption risk. Para 3.2 requires contractors to implement measures against corruption risk but does not make mention of subsidiaries and subcontractors. However, as these regulations are binding for companies participating in the tender and as contractors are encouraged to confirm that associated persons have not been convicted of corruption, score has been raised to 1.

Researcher + Peer Reviewer3857: An acquisition must be based on an identified military need based on capability and structured planning. However, the Wikleaks leak of US diplomatic cables in 2010 revealed that Norway was subject to an aggressive lobbying campaign from the United States to purchase the F-35 fighter jet. National media accused the Defence Minister at the time of favouring the American bid and communicating positive messages to the US privately during the tendering process. The Norwegian government maintains that the tender was awarded purely on a cost performance criteria basis.