Bhutan has long been known as one of the least corrupt countries in the south-Asian region. However, the limited freedom of the press and expression combined with the tight governmental control over the courts creates an environment prone to grand corruption. Moreover, bribery is reported in connection with public tenders and procurement, and many companies also complain about being faced with demands for facilitation payments when obtaining licenses and permits. The government of Bhutan has publicly announced that corruption and bribery are not tolerated, and established an anti-corruption legal framework in 2006.
Positive developments in relation to corruption and investment:
- In order to enhance administrative transparency, the government has created the Bhutan Portal containing valuable information on legislation, requirements and various licences.
- The Anti-Corruption Commission is engaged in reducing the administrative burden for individuals and companies and streamlining procedures for public sector paperwork.
- The amended Anti-Corruption Bill 2010 was endorsed in December 2010. The new bill imposes harder prison terms for passive and active bribery in relation to both public servants and tender bids.
Risks of corruption:
- The uneven and non-transparent handling of cases by public officials opens up for the use of facilitation payments.
- Collusion among bidders for public tenders is common. Bids are adjusted and kept low and the resulting 'profits' are distributed between the bidders. The integrity of tender committees is also questionable, and some observers claim that many of these committees are accepting bribes.
- The 2009 annual audit report issued by the Royal Audit Authority found that the total amount of money lost in fraud, corruption and embezzlement in 2009 amounted to BTN 20,768 million, with 77% of the irregularities taking place in the ministries, indicating widespread corruption among government agencies.