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What to make of the Prime Minister’s anti-corruption initiative – and his plans for a Summit?

Written by Robert Barrington on Wednesday, 27 January 2016

Today, Transparency International has launched the annual Corruption Perceptions Index and the UK, after an absence of nearly a decade, has re-gained a place in the top ten.  Despite the scepticism about how reliable such indices are (and you can read a debate about this here), it is clear to the anti-corruption community that something interesting is happening in the UK. 

In December 2014, in the final months of the last government, the UK published its first national Anti-Corruption Plan.  David Cameron had already gained credentials on the international stage by promoting the idea that good governance (ie fighting corruption) should be included in the new Sustainable Development Goals.   After the election, perhaps surprisingly to some, the Prime Minister’s rhetoric strengthened on the need to fight corruption – first at the G7, and then in a landmark speech in Singapore in July 2015.  Perhaps inevitably, there have been contradictory signs as well: the dropping of significant proposals putting personal responsibility on bankers for money laundering failings, cosying up unconditionally to leaders of states with a known corruption problem such as China and Saudi Arabia, and the extraordinarily inept review of the Freedom of Information regime.  As a result, all eyes are on the government’s planned Anti-Corruption Summit in May.  Will it demonstrate the rhetoric has been turned into a plan of action – or will it show that rhetoric is just rhetoric after all?

Establishing credibility between now and May 2016

Any government or leader who wants to take a global lead on an issue needs to establish the credibility and authority to do so.  There are good reasons why people are sceptical about whether Britain really merits a top-ten ranking: they point to overseas bribery by UK companies, the laundering of corrupt assets through the City, the lax regulation and lack of transparency in British-controlled tax havens, to say nothing of corruption scandals here in the UK.

The UK’s national Anti-Corruption Plan was designed to address some of these areas, but it has yet to be delivered.

Here are five achievable things the Prime Minister could do before the Summit to defuse criticism and show he is serious:

  1. Serious Fraud Office: back it and fund it.  This is the lynch-pin of the UK’s implementation of the Bribery Act, and has been subjected to budget cuts and political back-stabbing.  The government should give it unambiguous political support and increase the core annual budget to around £75 million.
  2. Unexplained Wealth Orders (UWOs).   It is now widely accepted that UWOs are a good idea – the question is not whether to introduce them, but how.  The government should initiate the legislative process, allowing time for a proper debate about how to make them work fairly and effectively.
  3. UK Land Registry.  Introduce beneficial ownership provisions.  It should be a requirement for any property registered in the UK that the beneficial owner is accurately recorded and that this information is publicly available.
  4. UK politics.   The sequence of petty political scandals around lobbying, the revolving door and party funding discredits the UK in the eyes of the world and gives fuel to the critics who want to portray Mr Cameron’s agenda as nothing more than hypocritical and sanctimonious.  He should acknowledge the problems in UK politics and, as an easily-achievable start with little political fall-out, commit to abolishing the Cabinet Office’s toothless Advisory Committee on Business Appointments (ACOBA) and replace it with a body that is fit for purpose.
  5. Overseas Territories.  The Achilles Heel in the PM’s anti-corruption plans.  It’s not just their role as centres of global money laundering: it’s the cronyism and corruption that has allowed this to happen.  The government needs a plan.

Just another Summit – or something better?

This Summit is a chance to do something different, and better. It is probably the first Summit of world leaders to be focused exclusively on tackling corruption.  Most anti-corruption Summits have failed in the past because the governments that turn up do not want them to work.  The elephant in the room is that some governments are themselves serially corrupt, and so – naturally – do not want global progress in reducing grand corruption, holding corrupt individuals to account or freezing assets that are the proceeds of corruption.  It is no surprise that such meetings consistently fail, and that there are some serial ‘blockers’ – countries that use spurious excuses to stop any progress.

This Summit can be different because it is a coalition of the willing.  It can and should be a Summit in which governments that are serious about tackling corruption come together and agree on real progress.  The hope is that having twenty serious countries make real agreements is better than the usual pattern of fifty countries that agree a lowest common denominator, which, even then, only a few enforce or implement.

However, there is a danger.  Diplomatic protocol will almost certainly dictate that some of the serial blockers are invited.  If this Summit is to succeed, it is vital that the blockers are not allowed to dictate the terms of the debate, and that it meets the high levels of aspiration laid out in the Prime Minister’s Singapore speech.  That is why TI and others have called for the active participation of business and civil society in both the planning and the Summit – to help the government meet its aspirations.

The Global context – four big themes

The Summit has the potential to drive progress in relation to justice, security, prosperity & a fair business environment, and the fight against extreme poverty. It can support action against public, private and sports institutions that have acted with impunity. While not all countries attending the Summit will be content to progress in all areas, there are some key policy themes and proposals which we believe could form the backbone of the Summit. These are:

  1. Stop the corrupt getting away with their crimes
  • Vigorously going after corrupt assets in major financial and property investment centres and making sure that those who grease the wheels of corruption, such as lawyers, bankers, and accountants, are made accountable for laundering corrupt capital.
  • Developing a visa denial-of-entry regime for suspects of corruption, with human rights and due process safeguards, and a corporate debarment regime between like-minded governments with the power to enforce it.
  • Improving intelligence sharing frameworks between law enforcement agencies in key countries, and between banks, business, civil society on risk and suspicions of corruption.
  1. Prevent corruption undermining global security
  • Strengthening oversight and increasing the transparency of defence and security institutions which can be greatest obstacles to peace in the most fragile countries.
  • Recognising the underlying causes of extremism which is often driven more by deep public anger at the abuse of official power than ideological conviction.
  1. Encourage a level-playing field, transparency and prosperity in business
  • Raising standards around the world for open contracting, the integrity of procurement systems and the transparency over the true owners of companies.
  • Levelling the playing field in enforcement of anti-bribery legislation. Only four countries are rated as ‘Active enforcers’ of the OECD Anti-Bribery Convention. Other countries should show they are serious and agree to become Active enforcers by a given target date and those countries that are not signatories to the Convention should commit to equivalent measures.
  • Establishing a ‘Transparency Dividend’ through a set of measures by which companies that meet a high standard of transparency and integrity are rewarded for doing so, for example making beneficial ownership transparency a condition of entering public contracts and that credit & risk rating agencies reflect a company’s anti-bribery standards.
  1. Support victims of corruption to secure justice
  • Returning money stolen from countries by the corrupt – but returning such money securely and with public accountability; and in the absence of that, looking at alternatives such as placing funds in an escrow account or global anti-corruption fund.
  • Providing legal support for those living abroad to challenge the corruption taking place at home.
  • Giving people clarity and visibility over what their governments and others with power over their lives are doing, with the help of open data and tech solutions.

What does Summit success look like?

The Summit needs to be successful in terms of both process and content. Here are some of the key ingredients:

Process:

  1. The Summit attracts the right people – governments that are serious about change, and governments that can influence the global agenda as well as their domestic settings.  That means 20 serious players.  So what does the PM do if one of the ‘blockers’ wants to come?  First, only agree if there is representation at the highest level.  Second, make it clear that a requirement of attending is to sign up to ambitious steps forward.  Third, ask for some positive proof that the country is serious.  Fourth, warn them that they may be a laughing stock in the media and subject to criticism from a civil society that, unlike in their own countries, is able to speak out about abuses of power.
  2. The right subjects are on the agenda – the Summit needs to be an ambitious attempt to change, and not simply encompass some minor administrative reforms on a limited number of subjects dressed up as major reform.   There is no single grand idea or silver bullet to solve corruption: but experts agree that a ‘building blocks’ approach, by which simultaneous progress is made by a number of states on a number of key issues, could have a substantial impact.
  3. Clear commitments or ‘deliverables’ are reached – it’s not just another talking shop with the same old men talking the same platitudes.
  4. Business and civil society are on board – and there is an acknowledgement that the Summit is ultimately about the victims of corruption whether individual or corporate.  Civil society and a free press are two of the (few) mechanisms that can promote transparency and accountability, particularly in countries that are not democracies; yet around the world, the space for more civil society is under severe threat.  The Summit is an opportunity to re-affirm the importance of civil society and for governments to commit to ensuring the space is maintained.  It’s also an opportunity to create a new paradigm for business.  Ultimately, business thrives when corruption is reduced, and that is good for economic development and society.  Governments should be creating the conditions for this to happen.
  5. The UK gets its own house in order so that it can speak to others with experience and authority – and a certain humility. See above on how the government can establish its credibility.

Content:

Taking the ‘building blocks’ approach, we might expect 8-10 key subjects to be on the agenda, such as the transparency dividend, sport, open data and asset recovery.  A successful Summit would be progress on all of these 8-10 areas.  That does not mean every country needs to sign up to everything (if China comes, it might use its usual arguments about sovereignty and non-interference to avoid some things that would really make a difference) but enough countries need to sign up to enough things that there is a critical mass for change.  So are there any bottom lines – things by which success or failure can be defined?  It’s difficult to predict without seeing what is on the agenda, but we expect civil society to make clear what the bottom line is once the agenda has become known.  Meanwhile, the four big global context themes outlined above give an indication that the expectations are high for this Summit – but they are also deliverable.

And after the Summit…?

Fighting corruption is a marathon, not a sprint.  To do this properly in the UK, the Government should build on the National Action Plan to develop a strategy to 2020.  At the moment we have a plan but not a strategy.  We – at last – have Cabinet Office unit to coordinate efforts, but no anti-corruption agency or equivalent functions.   When the dust has settled on the Summit, the UK will need an Anti-Corruption Strategy that covers:

  • Real achievables by 2020
  • Difficult areas, such as UK politics, relationships with highly corrupt allies, etc
  • A long-term plan for the UK including politics, corrupt capital, vulnerable areas of public sector, plus the basics: law enforcement, data gathering, public reporting, government open-ness
  • Achieving consistency among government departments so we no longer see BIS at odds with the Ministry of Justice over the Bribery Act, or the Treasury fighting DFID over tax havens
  • A global vision building on the Summit outcomes, and pressing forward on some areas that the Summit was unable to tackle such as a new global framework for prosecuting Grand Corruption.

The judgement of history

This year is big opportunity for the Prime Minister and the UK.  For the UK, it could place the country as a global leader on an issue that is of critical global importance, reinforcing the UK’s soft power, strengthening alliances with emerging powers and giving a strategic coherence to several foreign policy objectives.  For the Prime Minister, who will leave office by 2020, it could be his mark on history: reinforcing the global rule of law, improving the daily lives of millions of people, scaling peaks that other global leaders have hitherto been too timid to attempt and setting a new course for the world anti-corruption efforts for decades to come.  So far, Mr Cameron has generated expectation and goodwill.  2016 will be the year in which we will find out whether his anti-corruption vision will succeed or fail.

 

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Read 2619 times Last modified on Wednesday, 27 January 2016 13:41
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Robert Barrington

Robert is TI-UK's Executive Director. You can view his full bio here, and tweet him @TIukED.

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