A Trade-Anticorruption Breakthrough?: The Trans-Pacific Partnership’s Transparency and Anticorruption Chapter

The full text of the Trans-Pacific Partnership (TPP), released earlier this month, is already generating plenty of discussion. One of the proposed agreement’s most striking features is the full chapter on transparency and anticorruption, Chapter 26. The U.S. Trade Representative (USTR) had earlier stated that its objectives in negotiating the TPP included addressing transparency, accountability, and corruption; at the time I thought this was simply a negotiating ploy or marketing strategy, but it looks like I was wrong. As USTR’s summary of the “good governance” steps of Chapter 26 correctly notes, the TPP “includes the strongest anti-corruption and transparency standards of any trade agreement.” Indeed, Chapter 26–which appears to modeled in part on draft language that Transparency International had proposed for inclusion in a different trade deal, the Transatlantic Trade and Investment Partnership–could mark an important and unprecedented step towards using trade agreements to promoting and harmonize international anticorruption efforts.

Here are a few points that are or could be particularly important features of Chapter 26:

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Can’t See the Forest Because of the (Missing) Trees: How Satellite Imagery Can Help Fight Illegal Logging

Illegal logging is one of the gravest threats to the environment, and to the people (and countries) that depend on forest resources. Global Witness’s 2013 Annual Review describes industrial logging as a force that “drives land grabs, promotes corruption, contributes to climate change, fuels conflict and human rights abuses, and threatens over one billion people who rely on forests for their livelihoods and well-being.” The problem has been documented with surprising depth. Prominent examples include investigative work done by Global Witness (including two short films, Inside Malaysia’s Shadow State, which shows undercover interviews with members of then-Chief Minister of Sarawak Taib Mahmud’s family and legal team advising a “foreign investor” how to use bribery and fraud to illegally clear land for a palm oil plantation, and Rubber Barons, which documents land grabbing by a Vietnamese rubber firm), as well as other groups like the Environmental Investigation Agency, which recently recounted how army officials protect Chinese loggers’ passage into Myanmar, despite new laws entirely banning foreign exports of logs. In the popular media, NPR’s All Things Considered and The New Yorker looked at illegal logging in Russia and allegations of its yield being sold by major U.S. retailers, while The Economist called out HSBC’s involvement with dirty loggers. The issue is not confined to developing economies—a World Bank paper enumerated the breadth and variety of possible illegal acts surrounding the logging industry and its products worldwide, noting that practically all involve corruption. The problem, then, appears well-known and reported but remains widespread, possibly getting worse.

Illegal logging remains persistent largely because of pervasive corruption. A number of proposals have already laid out systems to address forestry corruption. Possibilities include land tenure arrangements that give management to local or indigenous groups, certification schemes for wood products, and a variety of monitoring and transparency mechanisms. A 2009 World Bank report provided a “comprehensive framework” involving five principal parts, each with a number of sub-components. Scholars, NGOs, and international organizations have noted the need for technology to increase monitoring capabilities. Technological developments may offer the key to progress in the fight against illegal logging—allowing circumvention of (or greater pressure on) the corrupt government officials who ignore, or sometimes participate in or profit from, the unlawful destruction of forests.

A previous post discussed one such technology, isotope provenancing, used to identify the origin of wood. This technology, however, has its limits. (For example, it does not help when forests are razed not to harvest the timber, but to clear the land for other uses, such as palm oil and rubber plantations.) Other new technologies can help show how corruption in the logging industry happens, working forward from the site of the problem instead of tracing back from imported products. One of the most promising tools—satellite imaging—is in fact already available, and could be very effective if deployed more appropriately and aggressively.

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Should the TPP Address Corruption? If So, How?

The Office of the U.S. Trade Representative (USTR) says it is trying to include anticorruption pledges in the proposed Trans-Pacific Partnership (TPP) trade deal. According to USTR, it not only wants “commitments to promote transparency, participation, and accountability” in trade issues (commitments USTR claims it has already had some success securing recently), but also more general “commitments discouraging corruption . . . among public officials.” It’s not entirely clear what USTR means, particularly with respect to this latter suggestion that it is going to push for more general anticorruption pledges in the TPP. Maybe it doesn’t mean much – it might just be feel-good rhetoric, with little connection to what’s actually going on in the closed-door TPP negotiations. But suppose that USTR is sincere, and that it genuinely hopes to include some sort of anticorruption language in the final TPP deal. Is this a good idea? If so, what sorts of anticorruption commitments would be appropriate in a mega-regional trade agreement like the TPP?

The idea of incorporating anticorruption measures into trade deals is hardly novel. (See this panel summary for some high-level background). Last year, Colette’s post on this blog recommended adopting Transparency International’s suggested anticorruption measures for the proposed Transatlantic Trade and Investment Partnership (the T-TIP), though she also opposed addressing corruption through the multilateral WTO regime. Other commentators and civil society groups have pressed for the incorporation of anticorruption measures in other regional free trade agreements (for example, see here and here). With respect to the TPP, these prior discussions suggest several considerations that USTR negotiators should keep in mind if they are serious about pushing for more anticorruption language in this agreement: Continue reading