Wednesday, February 16, 2011

Corruption: Wake-up Call for G20 to Banish Bribery

TI Chair Labelle and Hayman of Global Witness | GMedia Collage

By Jutta Wolf

Courtesy IDN-InDepth NewsReport

BERLIN (IDN) - Tunisia and Egypt should serve as a wake-up call to the Group of 20 (G20) industrial and emerging economies to put into practice long overdue decisions to root out corruption in public life, Transparency International (TI) and Global Witness, backed by 76 other organisations from around the world have warned.

At the same time, Gabriela Ramos, G20 Sherpa of the Organisation for Economic Cooperation and Development (OECD) has praised the French presidency for its "ambitious agenda" that included anti-corruption and financial inclusion.

The G20 comprises Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, Republic of Korea, Turkey, United Kingdom, USA, and the European Union,represented by the rotating Council presidency.

The Managing Director of the International Monetary Fund (IMF) and the President of the World Bank, as well as the chairs of the International Monetary and Financial Committee and Development Committee of the IMF and World Bank, also participate in G-20 meetings on an ex-officio basis.

TI chair Huguette Labelle said: "The time to act is now. On the streets of Cairo and Tunis we have seen crowds calling for an end to corruption. The G20 has said it would lead by example. People are rightly concerned about of the alleged wealth of former heads of state in Egypt and Tunisia. G20 countries should be doing everything they can to ensure any illicit financial flows are stopped and investigated."

Gavin Hayman, director of campaigns at Global Witness stressed: "G20 countries need to do much more to ensure that they are not providing safe haven to corrupt politicians or their dirty money. The G20 Anti-Corruption Action Plan (emerging from the November 2010 Seoul summit) is welcome, but as yet it lacks detail and a clear timeframe for implementation. At a time when people around the world are looking for ways to restore trust in governments and the financial system, transparency should be at the heart of the G20’s reform agenda."

In a letter to the G20, the staunch anti-bribery campaigners argue that corruption perpetuates poverty, impedes economic growth and fosters instability. "Sustainable development can only be achieved based on the rule of law and a sound, well regulated, accountable, financial system. This is not possible without tackling corruption."

The letter makes a series of recommendations on each area covered by the Action Plan, for example on how to curb banks' ability to accept corrupt funds, implement the UN Convention Against Corruption (UNCAC), and protect whistleblowers. The key theme is the importance of greater transparency, as well as the need for civil society input into the G20 process.

"Two of our recommendations -- registries of the beneficial owners/controllers of companies and trusts; and companies reporting their accounts on a country-by-country basis -- would provide investors, citizens and government agencies with crucial information to tackle financial crime and tax dodging," the letter says.

Four G20 countries have yet to ratify UNCAC: Germany, Japan, India and Saudi Arabia.


The Anti-Corruption Action Plan adopted in November 2010 in Seoul obliges G20 to lead by example in key areas, including but not limited to these alone:

1. To ratify or accede, and fully implement the UNCAC by G20 countries as soon as possible, to invite non-G20 states to ratify or accede the UNCAC and to strengthen the individual reviews in line with the current Terms of Reference of the Mechanism for the Review of Implementation of the UNCAC, by ensuring that our individual reviews, under the new implementation review mechanism, are conducted in an effective and thorough manner, and endeavour to enhance the level of transparency and inclusivity.

2. To adopt and enforce laws and other measures against international bribery, such as the criminalization of bribery of foreign public officials, and begin by 2012 the necessary discussions to lead to, on a voluntary basis, more active engagement within the OECD Working Group on Bribery with regards to the standards of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions or to the ratification of the Convention. G20 countries will as well promote the effective implementation of Article 16 on bribery of foreign public officials and public international organizations of the UNCAC.

3. To prevent corrupt officials from accessing the global financial system and from laundering their proceeds of corruption, we call upon the G20 to further strengthen its effort to prevent and combat money laundering, and invite the Financial Action Task Force (FATF) to continue to emphasize the anti-corruption agenda as we urged in Pittsburgh and report back to us in France on its work to: continue to identify and engage those jurisdictions with strategic Anti-Money Laundering/Counter-Financing of Terrorism (AML/CFT) deficiencies; and update and implement the FATF standards calling for transparency of cross-border wires, beneficial ownership, customer due diligence, and due diligence for "politically exposed persons".

4. To prevent corrupt officials from being able to travel abroad with impunity, G20 countries will consider a cooperative framework to deny entry and safe haven in our jurisdictions to corrupt officials and those who corrupt them. To that end, G20 experts will examine the possibility to develop common principles for national measures to deny entry of corrupt officials, taking into account existing practices and barriers, and recommend frameworks for bilateral cooperation on the application of this authority.

5. To strengthen international cooperation and to lead by example through our own efforts to tackle corruption and bribery, the G20 will promote the use of the UNCAC, particularly those provisions related to extradition, mutual legal assistance and asset recovery and offer technical assistance where needed, and encourage the signing of bilateral and multilateral treaties on extradition, mutual legal assistance and asset recovery. We will endeavour to address the technical assistance requirements identified by state parties through the implementation of the review mechanism of the UNCAC to further promote implementation of the Convention.

6. To support the recovery of proceeds of corruption stowed abroad, all G20 countries will adopt measures related to, inter alia, preventing and detecting transfers of proceeds of crime; measures for direct recovery of property; mechanisms for recovery of property through international cooperation in asset tracing, freezing and confiscation; measures for special cooperation in voluntary disclosure; and return and dispose of assets as enshrined in Chapter V of the UNCAC.

To this end, G20 countries will by the time of the 2011 Summit in France, establish clear and effective channels for mutual legal assistance, and other forms of international cooperation, on corruption and asset recovery, in particular, if they have not done so already, designate an appropriate authority responsible for international mutual legal assistance requests relating to corruption and asset recovery; establish points of contact for law enforcement and international cooperation on corruption cases; and develop specialized expertise for asset recovery in an appropriate agency.

7. To protect whistleblowers, who report in good faith suspected acts of corruption, from discriminatory and retaliatory actions, G20 countries will enact and implement whistleblower protection rules by the end of 2012. To that end, building upon the existing work of organizations such as the OECD and the World Bank, G20 experts will study and summarize existing whistleblower protection legislation and enforcement mechanisms, and propose best practices on whistleblower protection legislation.

8. To strengthen the effective functioning of anti-corruption bodies or enforcement authorities in the prevention and fight against corruption and enable these authorities to carry out their function free from undue influence, G20 countries will take as soon as possible the necessary actions to implement Article 6 (anti-corruption body or bodies) and Article 36 (specialized authorities) of the UNCAC.

9. To promote integrity, transparency, accountability and the prevention of corruption, in the public sector, including in the management of public finances.

Ahead of the Seoul Summit, while releasing the 2010 'Corruption Perceptions Index' in October 2010, Transparency International had lauded the G-20 for recognising corruption as "a global problem that must be addressed in global policy reforms".

"It is commendable that the Group of 20 in pursuing financial reform has made strong commitments to transparency and integrity ahead of their November summit in Seoul," said TI Chair Labelle. "But the process of reform itself must be accelerated," she added.