Guest Post: Time for UNCAC Mark II?

GAB welcomes back international anticorruption consultant Alan Doig, who contributes the following guest post:

The United Nations Convention against Corruption (UNCAC), which came into force in 2005 and has been ratified by 187 countries, is the oldest and most comprehensive Convention solely devoted to the prevention, detection, and investigation of corruption. Yet today UNCAC, for all of its importance, is not serving as an effective blueprint or framework for promoting innovative and effective responses to corruption. There are four main reasons for this:

  • First, perhaps due to UNCAC’s genesis in the UN Convention against Transnational Organized Crime, UNCAC is skewed too heavily toward the criminal justice aspects of anticorruption, as demonstrated by the fact that nearly 80% of UNCAC’s substantive Articles relate to law enforcement, asset recovery, and related issues.
  • Second, UNCAC left too many key terms undefined or underspecified, allowing for significant interpretation (or misinterpretation) of the Articles, and some 40% of UNCAC’s substantive Articles are non-mandatory; these factors tend to undermine the efficacy of the Convention.
  • Third, UNCAC’s review mechanism is too slow and fragmented, and fails to employ a sufficiently holistic framework that assesses performance and progress in implementation and impact.
  • Fourth, and most significant, UNCAC is not amenable to updating. This has meant that issues which were only emerging back in 2005, such as political-party funding or beneficial ownership transparency, only received limited attention. Issues that were once addressed, if at all, through ad hoc references scattered throughout the Convention are assuming more importance. The difficulty of updating the Convention derives in part from the insistence of the UN Office of Drugs and Crime (UNODC) that UNCAC may be used as a legal document suitable for treaty purposes—even though other international instruments serve similar purposes and its value as a treaty has been limited (as demonstrated by, among other things, the fact that UNCAC has been used for mutual legal assistance only 17 times in over a decade).

So, with a reboot of the existing Convention unlikely, maybe it’s time for a new Convention—an UNCAC Mark II. An UNCAC Mark II— which we might perhaps call the UN Convention on the Prevention of Corruption (UNCPC)—could provide a framework that promotes innovative, flexible, and forward-looking means to address corruption challenges, going beyond technical and compliance approaches.

The main focus of the proposed UNCPC, as the name implies, should be on mainstreaming prevention of corruption, both for its own sake and as a means toward wider objectives, such as trust in public institutions, good governance, and the rule of law. Chapters of such a convention could address, for example: risk assessment, developing strategic approaches, promoting public integrity, transparency and accountability, managing the political and partisan dimensions of public life, preventing profiting from corruption, prioritizing citizen-facing public services, and developing measurable progress and performance. In particular, and largely missing from the current Convention, a UNCPC should address the roles and expectations of a wide range of named in-country public and private sector organizations, as well as in civil society, to collectively mainstream the Convention as part of their work.

Such a Convention needn’t start from scratch. Its contents and coherence would come from synthesizing and integrating the wide range of the corruption prevention initiatives, most of which post-date UNCAC. These include, for example, the Kuala Lumpur Statement on Anti-Corruption Strategies, the international standard on anti-bribery management systems (ISO 37001), the Council of Europe’s work on public ethics, the extractive industries and other transparency initiatives, and the work of organizations like the UN Global Compact and the UNCAC Civil Society Coalition. The contents of a new Convention could also draw on the empirical evidence from GRECO reviews and Transparency International National Integrity Studies. Engaging with all these organizations, who have a stake in prevention, will foster a collective sense of ownership, and they can also take a leading role in monitoring and reviewing implementation of the Convention.

In contrast to UNCAC, this proposed new Convention should not seek global membership. Rather, the UNCPC should require both serious substantive commitments and acceptance of a rigorous whole-Convention peer-review system focused on demonstrable performance and progress. At the same time, evidence from practice on the ground will inform an equally rigorous review and revision of the Convention to ensure its relevance. The overall goal is a more comprehensive and dynamic Convention that provides a collective, mutually-supportive approach to anticorruption, one that seeks to achieve meaningful results within realistic timeframes.

Guest Post: Every Bank Robber Needs A Getaway Car; Banker Held Accountable For Money Laundering

GAB is pleased to publish this analysis by Emile J. M. Van Der Does De Willebois, Coordinator of the World Bank/UNODC Stolen Asset Recovery Initiative, of the significance of a decision of the Gerechtshof Den Haag, the Dutch appeals court in The Hague. As he explains, for too long authorities in the developed world have ignored the role lawyers, bankers, and other “enablers” play in facilitating corruption in the developing world.  Let us hope that the court’s decision marks a turning point in holding them accountable for their role in corruption crimes.  

Last month, a Dutch appeals court ordered the public prosecutor to initiate the criminal prosecution of the former CEO of the nation’s largest bank. The court directed that Ralph Hamers be put on trial for money laundering and other crimes the Amsterdam-based banking giant ING committed during his sevenyear tenure as its chief executive. Financial and legal professionals are rarely prosecuted for crimes they facilitate, and it is even rarer that senior executives, as opposed to the institution they run, are targeted. Until this decision, the indictment of Goldman Sachs bankers for their role in the 1MDB scandal was a notable exception.

The culpability of those who, like the driver in a bank robbery, facilitate a crime is not particularly controversial. We all know that the corruption that happens “over there” needs the services of bankers, lawyers, accountants and other facilitators “over here.” We like to pay lip service to the idea that “it takes two to tango” and acknowledge, at least verbally, that the financial and corporate services in the financial centers of the developed world facilitate the corruption found in large parts of the developing world.

But whether those working on anti-corruption always act upon that notion is another matter. A quick look at the Transparency International corruption perceptions index helps maintain the illusion that the rich developed world is doing well on corruption, and that, looking at the bottom of the table, corruption is really a developing-country problem. We have not really internalized the lessons of the Panama Papers, 1MDB, Danske Bank and, most recently, the FinCEN files, which shone a spotlight on the services provided by banks, lawyers and other professionals in making corruption possible.

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Guest Post: Sierra Leone’s Tenuous and Incomplete Anticorruption Campaign

Felix Marco Conteh, an independent research consultant based in Sierra Leone, contributes the following guest post:

Sierra Leone has a serious corruption problem. And while the importance of fighting corruption unites Sierra Leoneans—who tend to blame corruption for all the country’s socio-economic and political challenges—the citizens of this intensely polarized country remain divided on how to do so. The country seems to have fallen into a pattern in which each new administration pledges to tackle corruption, but adopts strategies that are aimed more at appealing to domestic and international constituencies in the short-term, rather than lay a foundation for longer-term success. The new administrations’ short-term strategies too often involve criminalizing politics in a way that appears to target the political opposition, contributing to deeper polarization and instability. Continue reading

Guest Post: Why Nigeria’s Main Anticorruption Body Should Not Become a Debt Collection Agency, and How to Stop It

Today’s guest post is from Pallavi Roy and Mitchell Watkins, respectively Research Director and Research Fellow at the University of London, SOAS Anti-Corruption Evidence Consortium (SOAS-ACE).

Nigeria’s Economic and Financial Crimes Commission (EFCC), established in 2003, was initially effective at investigating and prosecuting bribery, fraud, tax evasion, money laundering, and a host of other financial crimes. Indeed, it was instrumental in prosecuting senior political leaders and corporate actors involved in illegal activities, as well as in recovering significant stolen assets that belonged to the Nigerian state. More recently, however, the Commission has been subject to frequent political interference and corruption. For example, a recent SOAS-ACE study found that private actors—commercial banks, businesses, and high net-worth individuals—routinely exploit the coercive power of the EFCC to help them recover their debts, rather than turning to the courts and other civil dispute resolution mechanisms. This occurs even though, as a matter of law, civil debt collection lies outside the EFCC’s jurisdiction. Continue reading

Guest Post: The Ukrainian Constitutional Court’s Invalidation of Anticorruption Laws Has Plunged the Country into a Double Crisis

Today’s guest post is from Kyrylo Korol, a judicial clerk at the High Anti-Corruption Court of Ukraine.

This past fall, between August and October, the Constitutional Court of Ukraine (CCU) ruled that several of Ukraine’s most important anticorruption laws and institutions are unconstitutional.

  • The CCU first ruled unconstitutional the Decree of the President of Ukraine on the appointment of the director of the National Anti-Corruption Bureau of Ukraine (NABU), which is responsible for anticorruption investigations; the Court also invalidated the President’s powers to appoint NABU’s head, a decision that created uncertainty regarding the legitimacy of the current director of NABU. The Court reasoned that the because the power to appoint the NABU director was not included in the list of presidential powers specified in the Constitution, the President could not exercise this power. The CCU also ruled unconstitutional the external commission that evaluates NABU’s performance.
  • In a subsequent case, the CCU declared unconstitutional the powers of the National Agency on Corruption Prevention (NACP) to check the public official’s declarations of assets. The Court reasoned that the NACP’s powers to review asset declarations extended to asset declarations submitted by judges, and that this arrangement would give an executive body impermissible control over the judiciary. The CCU further ruled that the law that imposes criminal liability for knowingly submitting a false asset declarations was unconstitutional, on the grounds that the penalties (which can include fines of up to $1,700, community service, or, imprisonment and disqualification from certain offices) was unconstitutionally disproportionate to the damage caused by the crime. These decisions led to the closure of hundreds of criminal cases for false declaration and the acquittals of public officials who had been found guilty of this crime. Going forward, the elimination of penalties for public officials who fail to file asset declarations, or who file false declarations, essentially nullifies the financial declaration system.

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Guest Post: IMF General Counsel Rhoda Weeks-Brown on the Fund’s Role in Promoting Governance, Transparency and Accountability

Since 2018 the IMF has laid greater stress on governance and corruption issues in its annual reviews of member countries’ economic performance and when extending loans to stabilize their economies and restore economic growth. GAB is delighted to publish this post by Fund General Counsel Rhoda Weeks-Brown explaining why the organization strengthened its focus on governance and corruption and what it is doing to help member countries promote good governance and combat corruption.

The COVID-19 pandemic is a crisis like no other. It has brought about tragic human loss and suffering, coupled with disruptions in the social and economic order on a scale that we have not seen in living memory. The IMF’s response to help its member countries manage the crisis and save lives and livelihoods has been similarly unprecedented, including in the sheer speed and size of that effort. In only seven months, the institution has provided lending assistance of more than US$100 billion to over 80 countries, including over US$31 billion in emergency financing to 78 countries (as of December 4, 2020). We can all agree that the dire economic effects projected to result from the COVID crisis—including declines in living standards, increases in inequality, and a reversal of the decades-long declining trend in global poverty—have made the fight against corruption more urgent now than ever before.

Despite the speed of the IMF’s response, we have focused on safeguards to ensure that appropriate governance, transparency and accountability measures are in place even for our rapid emergency financing. This financing supports countries’ commitments to level up healthcare spending and provide income support for affected households and businesses. Our advice to countries has been “spend what you need, but keep the receipts.” Governments in turn have made firm commitments to address governance, transparency and accountability.

The IMF is also providing technical assistance to countries to help them make progress on these commitments. This reflects a clear understanding that improvements in transparency and accountability are driven by changes in institutional practices across multiple institutions involved in budgeting, spending, monitoring the use of public financial resources and responding to instances of misappropriation and misbehavior.

Governancekey to economic success

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Guest Post: Making the Most of “Windows of Opportunity” for Anticorruption Reform

Today’s guest post is from Florencia Guerzovich, María Soledad Gattoni, and Dave Algoso, a team of independent consultants who jointly authored the Open Society Foundation report on Seeing New Opportunities: How Global Actors Can Better Support Anti-Corruption Reformers.

Ukraine after the Maidan Revolution. Malaysia after the 1MDB Scandal. Brazil after Lava Jato.

In each of these countries—and in many other examples—something triggered a shift in the possibilities for anticorruption reform. Pick your favorite metaphor: the stars align, the winds shift, there’s a fork in the road. We use the term “window of opportunity”: a period when heightened attention to an issue like corruption makes anticorruption reforms more likely. When those windows open, reformers both inside and outside of government try to seize the opportunity to make progress, while contending with forces that aim to maintain the status quo or advance an authoritarian or populist response.

Reformers’ approaches shift in these moments, as do their needs. Though success is not guaranteed, the possibility of reform can increase when global support organizations—including foundations, multilaterals, and NGOs—are better able to meet those needs (while also doing no harm). What do reformers most need during these windows of opportunity? And what can global support organizations do to help meet those needs? With the Open Society Foundations (OSF), we undertook research into those questions, with a primary focus on three case studies:

  • In Guatemala, the “Guatemalan spring” that opened following the announcement of corruption investigations into President Otto Pérez Molina and others in 2015, and the subsequent election of Jimmy Morales;
  • In Slovakia, the mobilizations under the “For a Decent Slovakia” banner and reform efforts that followed the murder of investigative journalist Ján Kuciak and his fiancée Martina Kušnírová in 2018;
  • In South Africa, the fight against state capture, which ended Jacob Zuma’s presidency and led to the administration of Cyril Ramaphosa in 2018.

Our findings, presented in a recent OSF report entitled Seeing New Opportunities: How Global Actors Can Better Support Anti-Corruption Reformers, were not always what we’d expected when we started the research. Collectively, our analysis of these case studies and other examples suggests some rethinking in terms of how to best support anticorruption reformers so that they can take maximum advantage of windows of opportunity when they arise. Continue reading

Guest Post: The Coalition for Integrity’s New SWAMP Index Highlights Progress and Shortcomings in U.S. State Ethics Systems

Today’s guest post is by Shruti Shah and Alex Amico, respectively President and Legal Fellow at the Coalition for Integrity, a civil society advocacy organization focused on corruption in the United States.

The unprecedented health crisis has demonstrated yet again the importance of strong ethics and transparency laws—not only on the national level, but at the sub-national level as well. In the United States, citizens are looking to their state legislators and governors to provide leadership, even as the large sums of government being spent on the pandemic response raise concerns about corruption and self-dealing. It is essential for the public to have confidence that public officials will adhere to the highest standards of ethics and integrity. One way to ensure this is with a strong state-level framework for ethics laws. To improve our understanding of the existing frameworks, and to highlight priority areas for improvement, the Coalition for Integrity recently released the second edition of the States With Anti-corruption Measures for Public employees (S.W.A.M.P.) Index. This report updates and expands on our 2018 report, with two new questions to better reflect the state of ethics regimes. Continue reading

Guest Post: What Can Reformers Learn from the Populists?

Today’s guest post is from Michael Johnston, the Charles A. Dana Professor of Political Science, Emeritus, at Colgate University.

Few recent political trends have attracted as much concern as the rise of populism and illiberal democracy. Figures like Orbán (in Hungary), Duterte (in the Philippines), Bolsonaro (in Brazil), and Trump (in the U.S.), along with their enablers and sycophants, have disrupted democratic norms and processes in their home countries and encouraged similar movements elsewhere. They have emboldened corrupt and self-dealing actors while weakening and intimidating countervailing political forces. While populists frequently rail against a corrupt and decadent old order, promising to restore citizens to a position of power and sovereignty that in most instances they never actually enjoyed, these leaders seem to have little concern for those citizens after winning their votes. Indeed, perhaps we shouldn’t call these figures “populist” at all, given their tendency to abuse and mislead the very citizens they claim to represent. “Authoritarian nationalist” might be a more accurate label. But whatever we call them, they seem determined to undermine checks and balances and meaningful accountability, as well as the political trust and informal norms on which well-functioning governments depend.

This is bad news for those working to check corruption, as these populist/authoritarian nationalists’ undermining of accountability and institutional checks fosters a pervasive atmosphere of impunity. But might there also be important lessons that the anticorruption community can learn from these movements? I suggest that there are. Indeed, populist followings are telling us something important, something directly relevant to reform, if we listen closely. Continue reading

Guest Announcement: The World Bank Office of Suspension and Debarment’s Fifth International Debarment Colloquium

Today’s guest post is from Alexandra Manea, Legal Counsel at the World Bank’s Office of Suspension and Debarment.

The World Bank Group (WBG) sanctions system is a critical part of the institution’s multi-faceted anticorruption effort. Comprised of independent decision-makers, the sanctions system investigates allegations of misconduct in WBG-financed projects and, if those allegations are substantiated, can debar culpable companies and individuals from engaging in any WBG -financed activity for a period of time. The impact of a WBG-imposed debarment is amplified through a cross-debarment agreement with other Multilateral Development Banks (MDBs), including the African Development Bank Group, the Asian Development Bank, the European Bank for Reconstruction and Development, and the Inter-American Development Bank.

With the unprecedented amount of multilateral financing and public spending going toward crisis aid and recovery efforts, governments and aid agencies can use debarment to ensure that they work only with reliable and ethical business partners. In times of crisis, it is crucial to facilitate knowledge-sharing among stakeholders to increase the impact of connected efforts to fight fraud and corruption.

During a series of webinars over five consecutive weeks starting on September 22 (this coming Tuesday), the WBG’s Office of Suspension and Debarment (OSD) will host the fifth edition of its International Debarment Colloquium series, a flagship event that showcases developments in debarment systems worldwide and examines the various uses of debarment in the procurement and anticorruption contexts. Representatives from multilateral organizations, government, private sector, non-governmental organizations, and academia will discuss: Continue reading