A CALL FOR TOUGHER GLOBAL ACTION AGAINST CORRUPTION
ANEEJ OFFICIAL POSITION
Being a Memo To the UK Anti-Corruption Summit And Abuja Pre-Summit 2016 from the Africa Network for Environment and Economic Justice, ANEEJ.
British Prime Minister David Cameron is hosting an International Conference on Anti-Corruption on 12 May, 2016. The summit seeks to galvanise global response to tackle corruption. As well as agreeing to a package of actions to tackle corruption across the board, it hopes to deal with issues including corporate secrecy, government transparency, the enforcement of international anti-corruption laws, and the strengthening of international institutions.
According to the organizers, the summit will be the first of its kind, bringing together world leaders, business and civil society to agree a package of practical steps to:
• expose corruption so there is nowhere it can hide
• punish the perpetrators and support those affected by corruption
• drive out the culture of corruption wherever it exists
The summit will be preceded by a conference on 11 May for leaders in civil society, business and government who are championing the fight against corruption.
The Nigerian Government, on its part, organised a pre-Summit in Abuja on May 5, 2016 with President Buhari who is expected to deliver a keynote address on “Tackling Corruption Together” at the London event of 11th May, 2016.
This memo is the perspective of the Africa Network for Environment and Economic Justice (ANEEJ), a Non-Government Organisation working on anti-corruption issues in Nigeria ahead of both summits. It reviews some of the issues to be discussed in London from a Civil Society point of view.
KEY ISSUES WITH THE INTERNATIONAL WAR ON CORRUPTION
1.0 Ending Impunity for Corruption
In prosecuting the war against graft, it is important to ensure that those involved in grand corruption cannot continue with impunity. They must be brought to justice through active enforcement of anti–‐bribery laws, and/or that they face restrictions on their ability to travel, invest or conduct business overseas.
1.1 Complaints and Reporting Mechanisms
Central to ending impunity is the ability of the citizenry to report instances of corruption with the confidence that actionable information will be put to appropriate and effective use by law enforcement agencies and governments. Citizens need simple and effective ways to report corruption while governments and law enforcement agencies need to act on the information provided, addressing vulnerabilities and/or taking specific enforcement actions.
Digital technologies offer new opportunities to strengthen reporting mechanisms by expanding the ways citizens can report cases of corruption, efficiently pooling information from a wide range of sources, and speeding up the authorities’ ability to analyse and act on complaints data. Such initiatives typically work best when complemented by media coverage and provision of legal expertise and when backed by a strong political commitment. But they also need to take account of finite enforcement resources and manage expectations accordingly.
ANEEJ Position and Recommendation on Complaints and Reporting Mechanisms
Experience from South Korea, India, Indonesia and other countries show the potentials of technology to bring transformational change in strengthening accountability and addressing corruption. For developing countries with high risk of corruption such as Nigeria, we recommend the deployment of digital reporting systems in complaints and reporting mechanisms going forward.
1.2 Active Enforcement of Anti‐Bribery Laws and Regulations
Full enforcement of effective anti‐corruption laws remains crucial to ending impunity for corruption. This is particularly important for countries that play a major role in international trade. Commitments to counter bribery in the UN Convention Against Corruption and the OECD Convention on Bribery of Foreign Public Officials provide an essential framework. However, of the 41 signatories of the latter, only four were recently assessed to be active in terms of enforcements. One indicator is that a number of members of the Convention have yet to secure a single conviction. In addition, five countries have held ‘invitee’ status vis‐a‐vis the OECD Convention for several years, but have not yet moved to full membership.
Bilateral mutual legal assistance (MLA) and criminal justice co–‐operation agreements are also an essential part of the international enforcement framework. However, many agreements are rarely used or are used ineffectually, given the lack of mutual understanding or experience of practical cooperation. There is considerable scope to improve the way in which MLA agreements are used, including through encouraging informal cooperation, improving knowledge of different countries’ legal systems, and technological solutions.
The main barriers to achieving active enforcement of anti‐corruption laws and regulations internationally include lack of resources on the part of some poor countries that suffer from corruption, lack of political will on the part of countries hosting looted assets, and the economic benefits enjoyed by countries keeping looted assets in secrecy destinations and offshore centres.
ANEEJ Position and Recommendation
There appears to be particular scope to assist developing countries in improving their use of MLAs and criminal justice cooperation to pursue corruption cases. The UK is considering establishing a financing facility to help developing countries cover costs associated with corruption investigations in developed countries, including investigations, forensic accounting, and preparing MLA requests.
Also, serious corruption cases almost always cut across multiple jurisdictions. At present, coordination across prosecutors and law enforcement is typically ad hoc and is often determined by bilateral relationships.
It is therefore important to strengthen the use of MLA across borders. We recommend the establishment of a new International ordination Centre, possibly based in Interpol, which would work with other agencies. We believe that such a centre could support states seeking to take action against corrupt elites and associated parties. It could bring together in one place intelligence, analytical and investigative specialists from international financial centres and countries active in the investigation of serious corruption.
2. Empowering those Affected by Corruption
One major approach to tackling corruption is to ensure that the proceeds of corruption are returned to those from whom they have been stolen and by empowering those affected by corruption.
2.1 Asset Recovery
Efforts to recover the proceeds of corruption linked to the former regimes in Egypt, Libya, Tunisia and Ukraine have demonstrated the challenges that both requesting and requested countries face in seeking to recover and return stolen assets. Even when there is political will on both sides, asset recovery and return remains a time‐consuming and difficult task.
Asset return also needs to be seen to work for the benefit of those deprived of the stolen resources. Without transparent and accountable procedures, following best practice in such areas as public financial management, there is a risk that confidence is lost in the asset return process, reflecting concerns that the money may be re‐corrupted.
The Arab and Ukraine Forums on Asset Recovery (AFAR and UFAR) have played a useful role in mustering high–‐level international political support for asset returns, facilitating information exchange among law enforcement practitioners and coordinating technical assistance.
However, their focus on a small group of countries, or even a single country, is potentially limiting. We align with the call for the establishment of a global mechanism able to lead the international response to developments such as regime change or high–‐profile cases involving the theft of assets. In 2011, the United Nations Office on Drugs and Crime estimated that over 99 per cent of illicit funds flowing through major economies and offshore centres every year are not detected by law enforcement. Even out of the tiny proportion of illicit funds that are detected, law enforcement authorities struggle to freeze and recover those funds.
Again there is the issue of beneficial ownership of looted assets by Politically Exposed Persons (PEPs). The Panama Paper Leaks has revealed the potential involvement of these persons in illegal practices, themselves made possible by opaqueness offered by tax havens. Indeed, in Congo as in other developing countries, there is no requirement for companies to disclose the identity of the final beneficiaries.
ANEEJ nevertheless remains convinced that the measures against corruption and embezzlement of public funds can only be effective when there are no lacunas at the national legal system concerning the identity of the beneficial owners of companies, particularly in the extractive sector. It is the failure of governments of the resource-rich but poor countries to close such legal gaps that have given free rein to the financial arrangements used in particular to cover up the involvement of PEPs. Experience from the Panama Papers Leak has, therefore underscored the need for PEPs to be compelled by National Laws to publish their tax returns.
Our Position and Recommendations
Bold changes are therefore required in order to detect, freeze and seize the 99 per cent of illicit assets that are likely to be flowing undetected through the international financial system.
We recommend shutting down all offshore centre and safe havens across the world and PEPs compelled by National anti-corruption laws to publish their tax returns. The stolen funds stashed or laundered should be identified, frozen, seized and with proper safeguards returned to the rightful owners.
National legal frameworks for asset recovery also play an important role in enabling action to be taken even when the corruption took place in a different jurisdiction from that in which assets are located.
In some cases, the evidence necessary to secure a conviction is not available. We call on the international community to explore the scope to use unexplained wealth orders and non–‐conviction based confiscation procedures. This has the potential to make it easier to confiscate the proceeds of corruption and return these to their countries of origin. In Nigeria, the process of conviction-based approach to fighting corruption is very cumbersome and takes a lot of time and resources, often providing escape route for the corrupt. For a country like Nigeria, we recommend scaling up of a non-conviction based confiscation procedures.
2.2. Court Settlements
Corruption is not a victimless crime. But courts do not always take account of the perspective of those affected. Routine use of victim statements in anti–‐corruption court proceedings is one possible way to highlight the perspective of victims.
Our Position and Recommendation
We urge the developed countries to also explore using Overseas Development Assistance (ODA) to enable developing countries to participate in major corruption settlement cases. A recent Deferred Prosecution Agreement (DPA) in a bribery case in the UK resulted in a substantial payment to the country where the crime took place in addition to fines and costs.
3.0 Global Architecture and Tools
It is also important to consider how international institutions, technology and behavioural science can be more effectively deployed to combat corruption.
3.1 Global Anti–‐Corruption Architecture
An effective international system supports individual countries’ fight against corruption in a number of ways, including: providing an institutional and legal basis for cooperation (with UNCAC as the key universal legal instrument); providing other key international instruments, ranging from the OECD Anti‐Bribery Convention through to IMF fiscal transparency reports, helping set direction and provide political leadership; helping facilitate peer review; compiling data; setting standards; and facilitating the sharing of best practice.
The global anti‐corruption architecture has developed incrementally, with some aspects less developed than others. However, it rests, crucially, on strong contributions from a wide range of international institutions with specific roles. Coordination of this system is a major challenge: fragmentation of the system can mean that potential synergies are missed, and there is no international mechanism to identify critical areas for international action, help set direction, and encourage the different parts of the architecture to align around priority issues.
Our Position and Recommendation
We believe that Overseas Development Assistance (ODA) is playing a critically important role in supporting developing countries’ actions against corruption. Several bilateral and multilateral aid agencies are giving increasing priority to anti–‐corruption in their programming.
Through its Anti–‐Corruption Task Team, the OECD Development Assistance Committee is one of a number of bodies playing such an important role in promoting more effective, better–‐coordinated anti–‐corruption development assistance, even though a lot still needs to be done by the OECD. Many important international organisations address corruption and integrity issues in their work, but in a number of cases there may be scope to further strengthen the way they contribute.
We recommend increasing ODA for developing countries work against corruption. This can also be in area of technology (technical assistance).
The establishment of National Stolen Assets recovery framework which should include business and Civil Society actors is important. The Nigerian Government has promised to put one in place and we encourage the government to do so without any further delays.
3.2 Innovative Tools for Addressing Corruption
As corruption evolves, anti–‐corruption strategies require constant innovation and the application of the most modern technological and organizational approaches. Drawing on insights from academics, civil society and business can help to ensure we explore different approaches and learn lessons from them.
Our Position and Recommendation
Experiences from South Korea, India, Indonesia and other countries show the potential of technology to bring transformational change in strengthening accountability and address corruption. But technology is not a panacea, and its effectiveness is greatest when combined with an understanding of why people behave as they do. Adopting measures for behavioural change at country level would be very helpful going forward. We recommend timely sharing of intelligence and information on movement of stolen funds or suspected laundered finance and strategies to recover such stolen funds. Also, creating space for Civil Society participation, as an important stakeholder in recovery and monitoring of use recovered loot can prevent re-looting of returned assets.
For further Information contact:
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