The G20 nations, comprising the world’s largest economies, met in mid-November in Brisbane, Australia, and came up with an action plan on how to fight corruption.
The plan is an outgrowth of what happened in 2010 when G20 leaders created the “Anti-Corruption Working Group” at a summit in Toronto.
The push at the 2014 Brisbane meeting was for member nations to pass laws compelling corporations to identify who owns and controls them – the “beneficial owners.” It, however, fell short of demanding that these persons and entities be known to the public as well as regulatory authorities. That has drawn criticism from some “good governance” groups, including Global Financial Integrity.
Ahead of the summit, some observers voiced concerns that China would block action regarding identifying corporate owners. China’s use of “inducements” has been well known, especially in Africa, where the Asian giant has employed cash and other means to gain access to raw materials it needs to feed its industrial production.
“The Chinese people are generally far less concerned about foreign bribery than domestic bribery,” said Andrew Spalding, a law professor at the University of Richmond. “As the developed world increasingly enforces foreign bribery rules, this puts them at a competitive disadvantage in developing countries, especially in Africa. China knows that it can exploit this.”
By the summit’s end, though, China made no attempt to block the action plan or suppress use of the word “bribery.”
“G20 countries recognize that bribery imposes a heavy price on both international business and society as a whole,” the action plan document said. “Combating bribery remains an important priority for the G20 growth agenda, including by helping to level the playing field for business, and giving the private sector the confidence it needs to invest…G20 countries also commit to comprehensively and effectively criminalize bribery – as well as the solicitation of bribes – and enforce such laws through civil and criminal actions.”
The plan also addressed what it calls “high risk sectors” where corruption can invade legitimate market activity. The plan notes one area it calls “the extractive sector” – the mining and collection of raw materials from iron ore to timber.
“For companies in any of these industries, it is the areas of interaction between private and public sectors which are most likely to generate opportunities for corruption – for example, public procurement and customs,” wrote Brook Horowitz in the FCPA Blog, which focuses on corruption.
“Effectively preventing and combating corruption in these high-risk sectors is essential to create an environment conducive to investment and to ensure critical assets and resources are not diverted away from economic growth and development,” the plan said.
Public sector transparency and integrity is also a focus of the G20 plan. They are essential for “preventing the misuse or diversion of public funds and conflicts of interest, which can have a significant negative impact on economic growth and development,” the plan said.
Public official immunity – meaning persons in office are not prosecuted while in those positions – is a practice seen in many countries. It has been widely criticized by good governance groups as a means by which elected officials can engage in criminal activities such as corruption and get away with it – at least during their terms.
The Action Plan also calls on the private sector to adopt transparent and accountable standards of corporate behavior. It calls on G20 countries to institute and step up “developing anti-corruption education and training for business – and by examining best practices for encouraging businesses to implement robust compliance programs and self-report breaches of corruption laws.”
Another section calls for G20 members to approach the anti-corruption fight globally as well as within each state’s borders. The plan says they must “commit to helping to end impunity for corruption offenses, by working together to investigate and prosecute [offenders], to recover the proceeds of such offenses, and to deny entry and safe haven to corrupt officials and those who corrupt them – including mutual legal assistance and extradition consistent with the UNCAC [United Nations Convention Against Corruption]”
Greg Thompson, with Transparency International Australia, says now that the words of the 2014 G20 Summit have been put to paper, it’s time to carry them out.
“The devil,” he says “will now be in the detail of what every country – including Australia – does post-Brisbane to implement these actions.”