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The World Is Melting Down and the Cause is Corruption- The G20 Needs to Take Action

The G20 needs to strengthen regulatory authorities across its membership and expand sanctions for violating Anti-Money Laundering requirements.

WASHINGTON DC, Jul 1 2022 (IPS) - The G20 is meeting again next week in Indonesia for the second time this year- at a moment when the world is facing the most difficult economic, political and social challenges for decades.

At their core, these problems are driven by corruption- from the “weaponization” of graft by Russia in Ukraine to the lack of regulation of the enablers of corruption in G20 countries such as the UK. This malfeasance costs lives and livelihoods- and is directly responsible for everything from energy black-outs to food and fuel shortages.

Critical decisions are being made by the G20 about the ways that governments can collectively manage what is now considered a significant transnational threat to peace and prosperity. But despite the earnest anti-corruption commitments made by G20 countries annually, follow-up and delivery on these commitments is a challenge.

Despite the earnest anti-corruption commitments made by G20 countries annually, follow-up and delivery on these commitments is a challenge

Civil society has to make its voice heard on these issues now, before it is too late. The Civil-20 (C20)– which we Co-Chair- engages the G20 on behalf of civil society. Over the past several months we have collectively gathered ideas from civil society around the world related to five central corruption challenges on which the G20 must take action immediately: Anti-Money Laundering (AML) and asset recovery; beneficial ownership transparency; countering corruption in the energy transition; open contracting; and the transparency and integrity of corporations.

This is what the C20 members are telling the G20 it needs to do now. First, effective anti-money laundering efforts are key to detecting illicit financial flows from corrupt activities in countries like Russia.

The G20 needs to strengthen regulatory authorities across its membership and expand sanctions for violating AML requirements, in particular for large financial institutions and what are called Designated Non-Financial Businesses and Professions (DNFBPs) that facilitate illicit financial flows (such as lawyers or accountants).

Similarly, when assets are returned they need to be aligned to GFAR principles, including through the engagement of civil society and community groups to support the transparency of this process.

Second, the G20 has committed to lead by example on beneficial ownership transparency (the real ownership of companies) and has the opportunity to strengthen this commitment by strengthening G20 High-Level Principles on Beneficial Ownership Transparency in line with improved global standards, including those recommended by the Financial Action Task Force (FATF).

One challenge is integrating data and G20 member countries should also implement the Beneficial Ownership Data Standard to share and analyze data more easily- which would dramatically improve the ability of citizens to understand who owns companies that might be involved in corruption.

Third, there is massive amounts of corruption as the world transitions to clean energy, but corruption risks in the renewables sector are not unique- they follow many of the same patterns we have seen in infrastructure and the extractives industries, for example. As more and more countries transition towards renewable energy, it is important to prioritize resource governance in ways that align with existing agreed-upon high-level principles and best practices.

The G20 must regulate lobbying activities around clean energy- including through lobbying registries; enforce a strong and credible sanctions regime, including public databases of companies banned from tenders; and support independent civil society monitoring of large-scale energy projects through integrity pacts and other similar vehicles that help to ensure transparent procurement.

Fourth, government contracting is rife with collusion, nepotism and graft. The G20 must open up contracting processes and strengthen open data infrastructure by sharing information across the whole cycle of procurement for projects- from planning to contracting to awards and implementation.

Governments must also publish high-quality open data that is readily machine-readable so it can be used across multiple systems. This does not mean starting from scratch- there are standards for this, like the Open Contracting Data Standard (OCDS) and the Open Contracting for Infrastructure Data Standard (OC4IDS). It is a question of commitment.

Finally, not all G20 member countries are party to the OECD Anti-Bribery Convention and private sector bribery is not criminalized in every G20 member country as per the UNCAC provisions. This means companies can legally offer bribes to win contracts, and this has to be outlawed immediately.

The EU Directive for Corporate Responsibility Due Diligence includes requirements that the G20 should adopt immediately- for instance to identify the actual or potential adverse human rights impacts of corruption; to prevent or mitigate the potential impacts of bribery; and improve public communication around due diligence processes.

G20 members should also regulate the “revolving doors” through which government and business people can engage in favoritism; and invest in better partnerships between entities working on these issues such as regulators, law enforcement agencies and civil society.

This might all seem quite technical- but the negative impacts of corruption are not felt in government meeting rooms, but in the everyday lives of citizens. The G20 has for too long made excuses for the lack of action on this topic, and we are now seeing the devastating effects. Unless action is taken now, it will be too late.

These ideas were gathered through a consultative process as part of the C20 Anti-Corruption Working Group (ACWG), and represent the inputs of many civil society organizations.


Blair Glencorse is Executive Director of Accountability Lab and is Co-Chair of the C20 ACWG.

Sanjeeta Pant is the Global Programs and Learning Manager at the Lab. Follow the Lab on Twitter @accountlab.


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