In my two posts last week (here and here), I attempted to go through all of the 41 country statements submitted by the participants in the London Anticorruption Summit held earlier this month, to see what those statements had to say about four specific issue areas highlighted by the Summit’s joint Communique: (1) accessibility (and possibly transparency) of beneficial ownership information for companies and other legal entities, (2) public procurement transparency, (3) independence, effectiveness, and transparency of national audit institutions, and (4) whistleblower protection (and encouragement). I didn’t originally intend to say much more about this, other than putting the information out there for others to examine, but on writing up the summaries, I was struck by the following observation:
Of the four issue areas I picked out–all of which, again, were prominently featured in the Communique–I would characterize two (beneficial ownership and, to a somewhat lesser extent, procurement transparency) as relatively “new” topics that have generated a lot of excitement. (This is clearly the case for beneficial ownership; public procurement transparency has been on the agenda for much longer, though I put it in this category because a lot of the focus of discussion in this area has been on relatively new initiatives like e-procurement and the Open Contracting Data Standard.) The other two issues I chose to highlight–independent and competent audits of government programs, and adequate protection of (and, preferably, affirmative encouragement for) whistleblowers–have been part of the conversation for considerably longer, though that doesn’t mean we’ve yet seen anywhere near as much movement on either of those issues as we’d like. And, compared to the newness and (relative) sexiness of topics like beneficial ownership registries and e-procurement initiatives, whistleblower protection and audits seem a bit humdrum. (Audits especially. Even I get bored when I hear the word “audit,” and I happen to think they’re really important.)
The thing that struck me, when going through the country statements, was the dramatic lopsidedness of the attention lavished on beneficial ownership and procurement transparency (to say nothing of other topics I didn’t cover, like corruption in sports and improved asset recovery mechanisms), compared to the relative neglect of country commitments in the areas of improving national audit institutions and whistleblower protections.
By my count, out of 41 country statements, only three (counting generously) had anything substantive to say in connection with the Communique’s declaration of support for “the independence of supreme audit institutions and the publication of audit findings,” while another three had some vague statement that might be generously construed as relevant. A larger number did touch on fiscal transparency more generally, typically by declaring an intent to undergo (or consider) an IMF financial transparency evaluation. But most countries had nothing whatsoever to say about commitments to improve the independence and capacity of national audit institutions or to more widely publicize their findings.
Things were slightly better with respect to whistleblower protection, but only slightly. Just under half of the country statements included some explicit reference to whistleblower protection, but most of these statements were fairly vague statements of general support for the idea of whistleblower protection, without reference to any existing, promised, or proposed legislative or regulatory mechanisms. There was virtually no discussion of mechanisms to affirmatively encourage whislteblowing. And just over half of the country statements included no reference to whistleblowers at all, notwithstanding the fact that the Communique declared that the countries participating in the Summit “commit to make it easier for people to report suspected acts of corruption, to protect ‘whistleblowers’ from discriminatory and retaliatory actions, and to promote action by law enforcement agencies where credible information is provided.” (In fairness, some of the countries that didn’t mention whistleblower protection at all in their country statements actually have quite strong — though still imperfect — systems, the United States being the most obvious example. But my strong suspicion is that very few of the countries that entirely failed to address this issue in their country statements could plausibly claim that this omission is because they’re already world leaders on this subject.)
The bias in favor of the new and shiny is also evident in the coverage of the Summit and the country statements by major anticorruption NGOs. For example, the Transparency International press release on the Summit discusses (and does some nose-counting on) country commitments to beneficial ownership registries, and also mentions Open Contracting Data Standards, asset recovery, cross-debarment, and corruption in sports–but says nothing specific about the (relative lack of) explicit country commitments to improve domestic auditing institutions and to do more to encourage and protect whistleblowers. Something similar could be said about the responses of other organizations, like Global Witness.
To be clear, I don’t mean to minimize the importance of beneficial ownership transparency, offshore tax havens, public procurement transparency, and the other issues that countries and anticorruption advocates have chosen to make their main focus. And there’s something to be said for introducing into the conversation important issues that have been (or had been, until recently) neglected in anticorruption discussions, particularly the role of wealthy countries and certain financial centers in facilitating corrupt activity. But at the same time, I worry a bit that in our enthusiasm for making progress on these new issues (and perhaps experiencing the thrill that comes with raking the governments of wealthy countries over the coals), we may start to neglect other, more traditional issues, which may be just as consequential, if not more so.
Just to conclude by developing that last point into a more provocative claim: I’ll go out on a limb and assert that if I were given the choice between significant, meaningful progress on either (A) beneficial ownership transparency and/or a general crackdown on anonymous shell companies and similar vehicles, or (B) robust whistleblower protections and incentive schemes (with effective law enforcement follow-up), coupled with strong, independent national audit institutions capable of investigating government finances and publicizing the results, I’d go with option (B) (at least if I was focused mainly on fighting corruption). Indeed, I don’t think it’s really a close question. But maybe I’m wrong? Do others out there agree or disagree? And if you agree, how come that latter set of issues isn’t getting more attention, despite the fact that they were all also included in the Summit Communique?
Interesting points about the subjects receiving higher visibility at the Summit. In the lead-up, Transparency International worked really hard to push for the Summit to generate comprehensive commitments, concerned we might end up with a one-issue Summit. So we are really pleased with the breadth and depth (in some cases) of country commitments. Our web feature (https://www.transparency.org/news/feature/anti_corruption_summit_now_the_hard_work_begins) though also issued within hours of the communique, provides reference to a wider variety of the issues than the press release (and we note our frustration with limited progress on whistleblower legislation there).
However, if beneficial ownership transparency steals headlines, that’s because of the remarkable momentum growing on all sides, from governments to business to civil society (including non-corruption focused organisations) to academics to economists, and of course underscored by the interest in the Panama Papers disclosures a month prior. Fair enough that it occupies headlines. More interestingly, beneficial ownership transparency may be relatively “new” – but it’s not particularly sexy. Could you imagine five years ago, a Summit in which procurement and beneficial ownership steals headlines?
In any case, it’s now about what happens next. Our press release was an immediate response – and to the press. But don’t conflate that for an approach to follow-up. We have yet to issue a full analysis of the Summit. That’s because we are carefully looking at the 300+ commitments, working with our chapters and partners across all the countries to analyse whether these commitments are new and ambitious. This will help us see how successful the Summit actually was but also helps partners start to hold their government’s feet to the fire going forward – whether that be on beneficial ownership transparency or national audit institutions.
Thanks for the helpful reply. I tend to agree with just about everything you say. A few quick thoughts/reactions:
First, I’m laughing at myself (and others should be laughing at me too) for describing beneficial ownership transparency as a “sexy” topic. You’re 100% right that it only seems like a sexy topic because numerous groups, lead by civil society advocates and investigative journalists, has worked tirelessly to raise awareness about how these seemingly obscure rules of corporate law are actually really important contributors to the bribery, embezzlement, and other malfeasance that has usually attracted more attention. Looking back over my post, I realize that it might be read as pooh-poohing the significance of the work that all of these groups have done to get beneficial ownership transparency on the agenda. That was certainly not my intention. Rather, I was raising a note of caution about not allowing the genuine success in raising awareness of this issue to take too much focus away from other issues that have been on the agenda longer, but where there is still, as you say, a great deal of work to be done.
Second, thanks for the heads-up about the more in-depth analysis of the Summit results. I figured something like that was in the works, and I look forward to reading it when it’s ready. I don’t envy you the hard, often tedious work of going through each of the country statements one by one to analyze the nature of the commitments. (My two earlier blog posts were an attempt to do a much more superficial version of that, just for four issues that I picked out semi-arbitrarily, and I can’t pretend my eyes didn’t start to glaze over on several occasions…) I suppose one way you could read my post above is as a gentle and friendly suggestion to make sure that some of the older issues (ones that haven’t been the subject of recent campaigns and press attention)–issues like the need for strong, independent audit institutions, and the woeful state of whistleblower protection in many countries–continue to receive the attention they deserve. But it sounds like you’re already thinking comprehensively.
Thanks again for the thoughtful and informative response, and I’m very much looking forward to reading TI’s full analysis of the Summit. Perhaps I’ll do a post about it when it comes out! 🙂
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