There was a considerable amount of scepticism in some quarters when British Prime Minister David Cameron announced his international anti-corruption summit. The UK is not renowned for its vigorous fight against corruption – few of its companies have been prosecuted for bribes, London and the UK’s overseas territories are a hub for laundering corrupt capital, and no executives have ever been prosecuted for laundering. Was the summit just a PR exercise by the UK government, or was it, as some were saying, a once-in-a-generation opportunity for a significant leap in the fight against corruption?
There was certainly a lot of PR going on. Cameron touted the Summit as “the biggest demonstration of political will to address corruption for many, many years.” Given that only 11 heads of state turned up and that the G20 has been making annual high level statements on fighting corruption for the last 6 years, it seems a little over-egging of the pudding. The Global Declaration Against Corruption that came out of the Summit is described on the government’s website as ‘the first ever global declaration against corruption’. This would seem to ignore the UN Convention Against Corruption which is surely the only truly global declaration against corruption with 140 signatories (compared to the Anti-Corruption Summit’s 40).
PR aside, was the Summit worth it? The Economist noted that where most international summits are a flop, this one “was certainly not a complete waste of time.” The UN Secretary General described it as “a timely effort to reinvigorate the international response to corruption.” Getting countries to commit to doing specific things to fight corruption publically is always useful as long countries put their money where their mouth is and follow through. Quite how anyone is going to hold countries to account for what they committed to at the Summit is another matter.
So what were the bad bits?
For an anti-corruption summit, this one was shockingly untransparent. The government would not reveal who was coming to the summit or what was on the agenda beforehand. A couple of ‘stakeholder meetings’ and regular briefings for a small group of NGOs couldn’t compensate for that fundamental lack of openness, nor could live-streaming the summit (obviously most of the interesting discussions occurred previously behind closed doors).
The failure of the UK to either persuade or issue an Order In Council to force its Overseas Territories and Crown Dependencies to set up public registers of beneficial ownership may well be the defining failure of the summit for many. Such an order was used to force the territories to abolish the death penalty and decriminalise homosexuality in the past. As the Panama papers revealed, over half of the offshore companies set up by Mossack Fonseca were registered in the British Virgin Islands.
Only 6 countries agreed at the Summit to have fully public registers on beneficial ownership (with another 6 agreeing to consider it) – the other 38 signed up to meet a standard that was already set by the Financial Action Task Force in 2014, and agreed by the G20 in the same year: ie sharing beneficial ownership information with ‘competent authorities.’ It is worth remembering that the key reason why civil society wants public registers is that law enforcement bodies haven’t exactly covered themselves in glory fighting corruption. It has often (one might say usually) been investigative journalists and civil society groups that have uncovered wrongdoing while law enforcement have lagged massively behind. Unless civil society groups can get access to registers of public beneficial ownership, who will make sure law enforcement is actually doing its job?
And then there were some glaring omissions. It would have been good to see some much stronger commitments on whistleblower protection. Just before the summit, the whistleblower in the Panama Papers case said that he would provide the papers to law enforcement if he is given immunity from prosecution. Too many whistleblowers in the recent leaks have faced prosecution. Some really clear commitments by countries to review their whistleblowers procedures and develop best practice national frameworks would have gone a lot further than a generalised commitment to protect whistleblowers.
Meanwhile, commitments to transparency in commodity trading and ensuring victims of corruption are represented in court proceedings and settlements dropped off the agenda pretty much altogether during horse-trading over the Summit communiqué (though transparency in commodity trading made it into a couple of country commitment statements).
The good bits …
The announcement of a global asset recovery forum in 2017 will keep the issue of asset recovery on the agenda, but will need to be thought through carefully with some clear and early input from civil society. The creation of a new International Anti-Corruption Enforcement centre might be useful, though only 8 countries signed up to be involved, which is a little worrying – how much buy in will it really have? Would having one of the existing bodies actually monitor whether countries are responding to Mutual Legal Assistance requests (over 50% go unanswered currently) and naming and shaming those that don’t have been more effective? The commitment to open procurement and open contracting is good (it would be useful to know how much further it goes beyond commitments already made to this through the Open Government Partnership but reaffirming these commitments is no bad thing). And it was important that a commitment to exclude corrupt companies from procurement made it into the final communiqué.
The UK meanwhile has had to think carefully about how to get its own house in order. The possible introduction of Unexplained Wealth Orders and a requirement for companies buying property or participating in public procurement to reveal their beneficial owners are things that were simply not on the agenda even two years ago. Whether keeping corrupt money out of the UK will just entrench the trend of pushing such money to other less scrupulous jurisdictions is an interesting and under-discussed issue.
Corporate liability reform, meanwhile, which was dropped last autumn is now back on the agenda (though in a very narrow form). And the UK has finally decided to set up a central register of convicted companies to be excluded from procurement (something that campaigners have been arguing for for over a decade).
There is a lot more the UK could do however. Key among these would be showing long term commitment to the Serious Fraud Office and committing resources to it; ensuring that the Courts are set up and resourced to deal with economic crime; providing public information about allegations received and what action has been taken by law enforcement on them (including public explanations for why investigations have been dropped – too many allegations disappear into the black hole of enforcement at the moment never to emerge); and committing to ensuring that the bank accounts and assets of bribe takers are frozen in any bribery investigations (as the US Department of Justice has started doing).
To sum up:
From close up, the Summit was probably a small step rather than a leap in the right direction – though only time will really tell. There is no doubt that corruption has been on the agenda in the UK as it never has been before. Civil servants have been working flat out to really work out how the UK can deliver an anti-corruption agenda. But a vote to leave the EU in June could easily pull the rug out from under this agenda. If Cameron loses the EU Referendum his political life will be on the line, and there is no guarantee that a post-Cameron Conservative government, desperate to keep capital and investment coming into the UK and for UK companies to keep exporting, is going to care quite so much about corruption. If Donald Trump were to win in the US elections and repeal or weaken the Foreign Corrupt Practices Act, which he calls ‘a horrible law’, the prospects for fighting corruption might go very quickly from fairly rosy to looking very bleak indeed.