With the heads of government and the central bankers from the world’s twenty biggest economies about to gather in Brisbane for the G20, the emerging signs of a faltering global economy will inevitably top the agenda. But the gathering will also consider a progress report on a 2010 commitment to fight corruption – perhaps the most ambitious project yet undertaken by the group.
The progress report is unlikely to reveal that the project has made much headway. With Australia occupying the rotating presidency of the G20 this year, attorney-general George Brandis conceded as much when he told an anti-corruption roundtable in February that the commitment to greater growth and global financial integrity remained “more pressing than ever” but the agenda “still has a long way to go.”
G20 leaders established the G20 Anti-Corruption Working Group in Toronto in 2010 and endorsed the first Anti-Corruption Action Plan in Seoul later that year. At the 2012 Los Cabos summit, leaders renewed the mandate of the working group and called for a revised action plan, underlining a commitment to “closing the implementation and enforcement gap.” What this is saying, in plain language, is that international agreements should be enshrined in the domestic law of signatory countries and they should be enforced. This has palpably not been the case in various international anti-corruption efforts over the past two decades.
In recognition of the fact that corruption is no longer regarded as a localised problem but has wider implications for the global economy, the G20 plan is aimed not just at its members but also at the developing world. In setting the broad parameters for its 2013–14 action plan and beyond, the plan explicitly declared that G20 countries should “lead by example.” It called for those G20 countries that had not yet ratified the UN Convention Against Corruption, or UNCAC, to ratify and fully implement the treaty as soon as possible, and for all members to be transparent in compliance reviews.
With bribery seen as the most prevalent corrupt practice (and predominantly engaged in by corporations from wealthier countries operating in less wealthy countries), the G20 pushed for a greater effort to adopt and enforce laws and other measures against foreign bribery, and to promote active enforcement of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, the other key international anti-corruption compact. The convention is open to accession by any country which is a member of the OECD or has become a full participant in the OECD’s working group on the issue. China, India, Indonesia and Saudi Arabia are not yet on board, but China and Indonesia have joined the working group.
Signatories to the OECD convention are required to enact legislation that criminalises the act of bribing a foreign public official. While the OECD has no authority to implement the convention, it does monitor implementation and enforcement by participating countries. In practical effect, the convention has a very specific focus: while it deals with the bribery of foreign officials, it only criminalises the person or entity offering the bribe – the so-called “supply side” of corruption.
UNCAC is, of course, a far less exclusive club than the OECD. With 140 UN member states signing the convention and proceeding to various stages of accession and ratification, its reach is far broader and its focus less narrow than the OECD convention. It includes the demand side of bribery as well as money laundering, asset recovery, international cooperation and assistance for corruption prevention. But it, too, lacks any capacity to enforce its provisions, and its list of signatories includes countries with some of the worst corruption reputations.
Germany and Japan, two G20 members, have not ratified UNCAC, yet neither country is seen as particularly corrupt. New Zealand, regularly among the top five of the “clean” countries, is also a non-ratifier. The point here is that merely encouraging governments to sign and ratify is not enough unless real and committed action follows.
It is by no means clear that the battle against corruption, as patchy as it has been, is being won. As economic activity expands and diversifies, new opportunities for graft and corruption open up – for example, in the “offset” provisions used to attract foreign investment, especially in resource industries. Corruption also can change its shape, as it has in Vietnam, where efforts to control petty corruption have seen a rise in grand corruption.
An independent assessment of corruption in the Asia-Pacific region by Hong Kong–based Political & Economic Risk Consultancy concluded that while the actual magnitude of corruption in Asia and elsewhere might well have declined in recent years, public perceptions of the problem had become more heightened. Within Asia, it identified three factors that had contributed to a worsening in perceptions of corruption and of governments’ commitment to fighting it: corruption has been increasingly politicised in many countries, including China, Thailand, India, Cambodia and Malaysia; the fight against corruption has been tarnished by anti-corruption agencies themselves being embroiled in corruption scandals, as has happened in Singapore and Hong Kong, or being targeted by powerful individuals and bodies under investigation, as in Indonesia; and in numerous cases senior politicians have promised to crack down on corruption only to back down on promised legislation, as in India, or offer pardons to powerful figures convicted of corruption, as in South Korea.
For the G20 to have any appreciable impact beyond its immediate membership, it needs to use the major weapon in its anti-corruption arsenal, influence. The sheer breadth of the G20 action plan goes way beyond its constituent governments and central banks; civil society, business, media and NGOs have a role to play in this broadbrush scenario, and effectively harnessing such disparate players is in itself an onerous task.
But underlying the complex logistics is an even more pressing issue. If the G20 is to have any moral suasion in countries where corruption is rampant and largely unchecked, its own members need to get – and be seen to be getting – their own houses in order. The diverse make-up of this group of the world’s largest economies means that within its ranks are countries in which the incidence and extent of corruption are seen as relatively low, such as Australia and Japan, and also those that rate relatively higher, such as China, India and Indonesia. In terms of transparency of governance, seen as necessary to fight corruption, Saudi Arabia presents a real problem.
But international report cards suggest that even those countries regarded as relatively “clean” are failing to fulfil their international obligations to combat corrupt practices as well as they might. OECD evaluations of the three G20 members in the Asia-Pacific region to have signed the OECD convention – Australia, Japan and South Korea – rate their efforts as only “moderate” and list areas in which they can boost compliance.
These observations are not to disparage or diminish the very real achievements under both conventions. The OECD initiative saw a significant increase in the number of bribery cases prosecuted worldwide in the first decade of the century, including some very prominent corporate entities. UNCAC, for its part, has raised awareness of corruption issues and has been instrumental in encouraging the establishment of anti-corruption institutions, just as the World Bank, the IMF and Transparency International have been at the forefront in promoting transparency and accountability in government.
But the unanswerable questions are whether their combined efforts have in any meaningful way reduced the levels and extent of corruption, and whether the G20 can realistically, with such a broad program, hope to make measurable progress in the fight against corruption. •
