Despite unprecedented challenges, 2022 also opened windows of opportunity to move the needle around critical anti-corruption issues, such as anti-money laundering, asset recovery, beneficial ownership, and renewable energy. Credit: Shutterstock.

By Sanjeeta Pant
Sanjeeta Pant, Jan 25 2023 (IPS)

The G20 India Presidency is marked by unprecedented geopolitical, environmental, and economic crises. Rising inflation threatens to erase decades of economic development and push more people into poverty. Violent extremism is also on the rise as a result of increasing global inequality, and the rule of law is in decline everywhere. All of these challenges impact the G20’s goal of realizing a faster and more equitable post-pandemic economic recovery.

But as India prioritizes its agenda for 2023, it is corruption that is at the heart of all of these other problems- and which poses the greatest threat to worldwide peace and prosperity.

An Idea Whose Time Has Come

Although the G20 has repeatedly committed to the Financial Action Task Force's (FATF) anti-money laundering standards, member countries have been slow to implement policy reforms

Despite unprecedented challenges, 2022 also opened windows of opportunity to move the needle around critical anti-corruption issues, such as anti-money laundering, asset recovery, beneficial ownership, and renewable energy. When global leaders meet during the G20 Indian Presidency , they must prioritize and build on this progress, rather than make new commitments around these issues that they then fail to implement.

According to the UN, an estimated 2-5% of global GDP, or up to $2 trillion, is laundered annually. Although the G20 has repeatedly committed to the Financial Action Task Force’s (FATF) anti-money laundering standards, member countries have been slow to implement policy reforms. In the wake of the Russian invasion of Ukraine and ineffective economic sanctions against Russian oligarchs, governments have started reexamining existing policy and institutional gaps, especially recognizing the role of Designated Non-Financial Businesses and Professions (DNFBPs), also known as “gatekeepers.”

G20 member countries are responding to concerns and criticisms from their national counterparts regarding failures to adopt FATF recommendations and clamp down on “dirty money.” Grappling with the need to be able to prosecute money-laundering cases and recover billions of dollars worth of frozen assets, they are also amending national laws to be able to do so.

Lack of beneficial ownership transparency is also aiding the flow of laundered money globally. The G20 recognizes beneficial ownership data as an effective instrument to fight financial crime and “protect the integrity and transparency of the global financial system.”

The Russian invasion helped drive home this message, especially among countries that are popular destinations for those buying luxury goods and assets. FATF’s amendment of its beneficial ownership recommendations in early 2022 was timely. Member countries are also introducing new reporting rules, and fast-tracking policies and processes to set up beneficial ownership registers. While there are still gaps in the proposed policies – as identified here– these are important first steps.

Similarly, the transition to renewable energy, initially raised as an environmental issue and then as a national security concern is increasingly gaining attention from a resource governance perspective. Given the scale of the potential investment, there is a need to tackle corruption in the energy sector to avoid potential pitfalls resulting from a lack of open and accountable systems as we transition to a net zero economy.

The cross-cutting nature of the industry means a wide range of issues– from procurement and conflict of interest in the public sector to beneficial ownership transparency- need to be considered. The global energy crisis and the Indonesian Presidency’s prioritization of the issue have helped build momentum around corruption in the renewable energy transition, and this focus must continue.

Calling on India

Corruption-related issues identified here are transnational in nature and have global implications, including for India. For instance, with money laundering cases rising in India, it cannot afford to regard it as a problem limited to safe havens like the UK or the US. The same is true for the lack of beneficial ownership transparency or corruption in the renewable energy transition, which fuels illicit financial networks in India and beyond, and which often transcend national borders.

Finally, corruption has a disproportionate impact on the global poor. Almost 10% of the global population lives in extreme poverty, many of whom live in countries such as India. The G20, under the Indian Presidency, provides a unique opportunity to ensure the voices of the most vulnerable are heard at the global level. By prioritizing the anti-corruption agenda and building on past priority issues and commitments, the Indian government can lead efforts to bridge the North-South divide.

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

Many of the global crises we face are caused or exacerbated by corruption. Credit: Ashwath Hedge/Wikimedia Commons

By Blair Glencorse and Sanjeeta Pant
WASHINGTON DC, Sep 27 2022 (IPS)

As global crises mount, the G20 is proving unable to find solutions. Political disagreements within the bloc- including most prominently with Russia over the ongoing war in Ukraine- have hamstrung collective efforts.

Economic challenges have inevitably led to a focus on domestic priorities. And significant political changes in key G20 countries over the past few months- such as the UK and Italy- have further undermined joint decision-making.

Equally, on corruption issues, the G20 has a long way go, although the body continues to reiterate its commitment fighting graft and leading by example on core issues such as the role of audit institutions, anti-corruption education, money laundering and graft in the renewable energy sector.

The G20 Anti-Corruption Working Group (ACWG) meets for the final time under the Indonesian Presidency this week- and while there remains plenty to do, there are also glimmers of hope for the future, as India takes on leadership of the G20 for 2023.

It is easy to get disheartened about the continued ubiquity of corruption- but beyond the headlines and if we pay attention to the small print, there is some important progress being made

To better understand the progress made, Accountability Lab, as one of the international Co-Chairs of the C20 Anti-Corruption Working Group (ACWG), has partnered with the Royal United Services Institute (RUSI) to distill complex and scattered information on anti-corruption within G20 countries (often buried in lengthy reports, as we’ve highlighted previously) into a set of easy-to-understand one-pagers. Each of these (see Australia here or South Africa here for example) outlines for each of the member countries the progress made against key priorities, with the goal of encouraging sharing of ideas and learning within the G20.

Here is what we found:

Enhancing the role of audit in tackling corruption

The G20 ACWG recognizes the important role of audit in preventing corruption in both the public and private sectors, and member countries have institutions and systems in place to deter corruption.

For instance, 17 out of the 19 G20 member countries (the 20th is the EU) score over a global average of 63 on the International Budget Partnership’s metric for oversight by supreme audit institutions. Brazil has received a great deal of scrutiny in recent years because of corruption, but Brazil’s Tribunal de Contas da Uniao (TCU) is cited as an example for its innovative use of data analytics and artificial intelligence including identifying indicators of corruption.

Member countries are also improving existing laws, with Japan proposing to reform its audit law to provide more enforcement power to the Japanese Institute of Certified Public Accountants and improve oversight of listed companies.

Promoting public participation and anti-corruption education

Most G20 member countries have policies guaranteeing the right to participation through specific laws such as the right to information, public information disclosure or public procurement, to name a few.

In India, the Pre-legislative Consultation Policy was passed recently to ensure public participation in policy-making processes, and government as well as civil society platforms are available to promote public education, including on corruption issues.

Similarly, South Korea’s Public-Private Consultative Council for Transparent Society under the Anti-Corruption and Civil Rights Commission provides a platform to inform and disseminate anti-corruption messages. South Korea also aims to strengthen civic space and public participation including through a national Participatory Budgeting Citizens’ Committee.

In Australia a public-private partnership (Bribery Prevention Network) launched in October 2020 bringing together the private sector, civil society, government and academia to provide free resources to help corporates implement anti-bribery programmes, and was runner up in the Anti Corruption Collective Action Awards 2022.

Professional enablers of money laundering

The G20 acknowledges gaps in member countries’ anti-money laundering efforts, particularly related to preventive measures targeting professional enablers, including accountants, lawyers, or real estate agents- and is aiming to pull together guidance on these issues through a Compendium for Professional Enablers of Money Laundering.

While most countries do not have a comprehensive definition of Designated Non-Financial Business Professionals (DNFBPs), Indonesia, Japan, Mexico, and Saudi Arabia comply with the 2012 Financial Action Task Force (FATF) standards on the definition. The 2021 follow-up review from FATF noted that the revisions to China’s anti-money laundering law will include general provisions and supervision of DNFPBs.

In the US, if the ENABLERS Act– which was approved by the House of Representatives in July 2022– is passed by the Senate, it could regulate professional enablers; and in the UK, lack of supervision of enablers is being acknowledged by the government as it looks at different models to strengthen the supervision of accountants and lawyers.

Promoting corruption in the renewable energy sector

The G20 is working on a background note on Promoting Anti-Corruption in Renewable Energy in order to raise awareness and increase collaboration to prevent corruption in the energy sector. In 2022, Argentina launched an open information system (SIACAM) which provides public access to data on mining activities in the country, including their environmental and socio-economic impacts.

The Resource Governance Index notes that Argentina is one of only 7 countries that has made this type of data available. Similarly in Mexico, progress has been made with the publication of all oil procurement contracts on the state-owned website oil company, Pemex.

Japan’s cooperation agreement with India and the European Union to share experiences and best practices on liquid natural gas is cited as an example to follow by the International Energy Agency.

It is easy to get disheartened about the continued ubiquity of corruption- but beyond the headlines and if we pay attention to the small print, there is some important progress being made.

With the G20, the key now- as India assumes leadership of group- is for member countries to double down on their commitments and follow-through on implementation of reforms. Many of the global crises we face are caused or exacerbated by corruption- now is the time for our leaders to get this right.

Blair Glencorse is Executive Director of Accountability Lab; Sanjeeta Pant is of Accountability Lab. This piece draws on research carried out with RUSI. Follow the Lab on Twitter @accountlab

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

By Blair Glencorse and Sanjeeta Pant
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.

With the bloody war in Ukraine dragging on, can the G20 still justify procrastination on the global anti-corruption agenda? Credit: Marianela Jarroud/IPS

By Blair Glencorse and Sanjeeta Pant
WASHINGTON DC, Mar 25 2022 (IPS)

The world has quickly transitioned from a global health crisis to a geopolitical one, as the war in Ukraine rages into its second month. But the Russian invasion of Ukraine is just the latest in a long list of challenges that at their heart are either caused by or exacerbated by corruption.

Just this year, think of the protests in Sudan, the coup in Burkina Faso, the nationwide demonstrations in Kazakhstan, or the Portuguese elections, for example- all driven, one way or another, by graft.

While G20 countries have made progress within their national borders, there are often lax laws in offshore tax havens that are under their jurisdictions. Equally, beneficial ownership data should not just be open (to regulators and enforcement agencies), it should be public. Citizens and civil society everywhere should be able to monitor conflicts of interest or relationships between policymakers and corporations, free of charge

Now- countries including the US and Europe– are coming together to freeze the assets of Russian oligarchs, but this is not just about Putin’s kleptocracy. As world leaders meet at the G20 next week, it is imperative that they step-up further to fight corruption both at home and abroad.

The Civil-20 (C20), which engages the G20 on behalf of civil society, has been calling for increased accountability from world leaders on critical anti-corruption issues for a long time. The war in Ukraine has only reinforced the need for a focus on the priorities identified by the C20 this year.

First, combating money laundering and the recovery of stolen assets. There are numerous studies that indicate that as much as 85% of Russia’s GDP is laundered into countries including the UK and the US.

There are networks of enablers in Western countries that facilitate this process- from accountants, to lawyers to real estate agents (known as Designated Non-Financial Business and Professions (DNFBPs).

But according to the data collected by Accountability Lab for the G20 Anti-Corruption Commitments Tracker, not all G20 member countries are compliant with FATF recommendations on DNFBP due diligence.

Similarly, others do not have effective frameworks to disclose information on recovered assets. Recognizing the increased risks to anti-money laundering and asset recovery efforts from such omissions, the C20 has called for verified beneficial ownership data through public registers; and the assessment of the effectiveness of measures adopted by the G20 member countries including sanctions for non-compliance.

Second, countering corruption in the energy transition. The G20 Indonesian Presidency has included a sustainable energy transition as a priority issue for 2022. More and more countries, especially in Europe, are cutting ties with Russian energy supplies, which will lead to a more rapid shift of resources towards renewables- but the potential in this for corruption is huge.

Certain countries and energy companies have a variety of incentives to maintain the status quo in corrupt ways; while the supply chains for raw materials for renewable energy are also wide-open for illicit activities. G20 countries urgently need to better understand the level and types of corruption in renewables; and commit to providing transparent data around licensing contracts and budgets.

In this, grassroots civil society groups can be valuable allies by filling information gaps and closing feedback loops in communities affected by renewable energy related projects.

Third, the transparency and integrity of corporations. The recent sanctions against Russian oligarchs have renewed focus on corporate governance and how corporate compliance on issues like foreign bribery, corruption and conflict of interests- including in state owned enterprises and public private partnerships (PPP)- are effectively enforced.

For instance, the Foreign Corrupt Practices Act (FCPA) focuses on anti-bribery and internal controls- and is likely to be further enforced, particularly in countries with close ties to Russia.

But beyond this, G20 member countries must also live up to past commitments to strengthen transparency and integrity in business by criminalizing private sector bribery; enacting whistleblower policies in the private sector; and ensuring accounting and auditing standards to prohibit off-the-book accounts.

Fourth, beneficial ownership transparency. The level of secrecy used by Russian oligarchs to hide assets through shell companies, trusts, partnerships and foundations has been headline news. Concerns around beneficial ownership transparency data (the data on who really owns companies) is not new (see this call to action for example).

While G20 countries have made progress within their national borders, there are often lax laws in offshore tax havens that are under their jurisdictions. Equally, beneficial ownership data should not just be open (to regulators and enforcement agencies), it should be public. Citizens and civil society everywhere should be able to monitor conflicts of interest or relationships between policymakers and corporations, free of charge.

It still costs $40 to access beneficial ownership data in Indonesia for instance- making this far too expensive for the average citizen. All G20 countries should lead by example and commit to open, public beneficial ownership registers.

Finally, Open Contracting. The recent focus on how the Russian military may have misused procurement processes has sadly highlighted again the importance of due diligence and open data. Civil society has unequivocally called on G20 member countries to proactively disclose information at every step of public procurement processes, in line with Open Contracting Data Standards as well as the Open Contracting for Infrastructure Data Standard, and to increase audit and citizen oversight in public procurement.

These reforms are past due. At the same time, successful initiatives like Opentender.net in Indonesia show how civil society can partner with governments to ensure citizen led oversight and the transparency of public procurement.

The Russia-Ukraine crisis is a stark reminder of how corruption issues must be central to any discussion about the causes and solutions to geo-political problems. The C20 has already outlined for G20 leaders how to address these issues- they now have the responsibility to implement these reforms.

Even in peace-time, the economic and human costs of corruption are massive. With the bloody war in Ukraine dragging on, can the G20 still justify procrastination on the global anti-corruption agenda?

Blair Glencorse is Executive Director of the Accountability Lab and is the International Co-Chair of the Civil 20 Anti-Corruption Working Group in 2022.

Sanjeeta Pant is a Programs and Learning Manager at Accountability Lab and leads the G20 Anti-Corruption Commitments Tracker. Follow the Lab on Twitter @accountlab and the C20 @C20EG

Kathmandu’s main infectious diseases hospital in Teku is full, and patients are being cared for in open verandahs and parking lots – a scene repeated in government hospitals across the country. Credit: Nepali Times.

By Narayan Adhikari and Sanjeeta Pant
KATHMANDU, May 20 2021 (IPS)

If you live in Nepal, a quick survey of friends and family will quickly prove how rapidly Covid-19 infection rates have spiked. For instance, out of 50 people we called last week, more than half had been infected, with the rest reporting that their extended families or colleagues had tested positive.

Recently, the sister-in-law of one of the authors- just 58 years old- died from the virus. She would have survived COVID-19 but despite a frantic rush around the city, we could not find an ICU bed in any of the hospitals in Kathmandu.

These are the kinds of stories that are now dominating headlines- as our health system buckles under pressure. People are dying while waiting in line not just for treatment, but for COVID-19 tests.

Beyond vaccines, the cure for COVID-19 is citizen engagement. It is too easy- and also simply too slow during an emergency- to simply finger point at national political leaders, as culpable as they are

India has dominated the COVID-19 headlines recently, but Nepal is now the global epicenter of the pandemic. The virus is spreading uncontrollably– on a per capita basis we now have 211 infections per 100,000 people, compared to India’s 130 per 100,000. And once again it is becoming clear that both the causes and symptoms of this disaster are not related to healthcare, but are at their core, issues of corruption and lack of accountability.

While countries like New Zealand and South Korea are clear examples of how coherent leadership, transparency, creative public-private partnerships and ongoing citizen engagement can ensure effective COVID-19 responses, Nepal is the complete opposite.

Petty political infighting, opacity in decision-making, nepotistic contracting and complete disregard for citizens’ concerns have characterized the response. Just last week it became clear that a private company called Hukam Distribution and Logistics refused to deliver vaccines from India because they were not paid a 10% kick-back- venality of the highest order which will lead to hundreds of unnecessary deaths.

Our healthcare system has been undermined by corruption and a lack of integrity for as long as anyone can remember- we have never been prepared for a crisis of this kind. Healthcare has become a commodity only for those who can afford it.

It takes hunger strikes by well-known doctors to catalyze even the beginnings of any discussion about reforms. As a result, in early 2020 when COVID-19 emerged in Nepal, we had some of the worst public health outcomes in the world. You might think that our experience with the dual, devastating earthquakes of 2015 would have built some degree of crisis preparation and management capacity within government, but we are now making all the same mistakes as six years ago.

Beyond vaccines, the cure for COVID-19 is citizen engagement. It is too easy- and also simply too slow during an emergency- to simply finger point at national political leaders, as culpable as they are. Citizen engagement now means three things.

First, it entails an understanding that change needs to begin with all of us. We ourselves need to find ways to collectively organize together to hold the government accountable. There are emerging efforts to do this such as the “Enough is Enough” campaign which forced the government to disclose COVID-19 spending and expand testing facilities.

Other organizations such as Shaasan are finding ways to crowdsource citizen concerns and score the performances of public officials; and our own efforts through our Coronavirus Civic Action Campaign are countering misinformation and ensuring citizen voices are heard as part of decision-making at the local level around the pandemic. These ground-up initiatives can make a difference when citizens get involved on a large-scale.

Second, open data is key to ensure transparency and accountability of the response. Transparency is the bedrock of democracy and accountability and information in Nepal is scattered, incomplete and inconsistent. Organizations run by citizens like Open Data Nepal and Open Knowledge Nepal have tried to open-up government, and the health Ministry’s COVID-19 dashboard provides some information, but it is not updated in real-time and is not in a format that makes it easy to synthesize.

And in any case only just over a 1/3 of our population has access to the internet. We need to find new ways to engage citizens around information about the response and how they can get involved. In Nepalgunj, a city in western Nepal, the government uses digital billboards to disseminate information to the public that citizens are now using to monitor decision-making.

This leads us to the last point, which is that we as citizens need to support and amplify the work of local political leaders who are doing the right thing during the pandemic and demonstrating that citizens come first.

In Dhangadhi municipality in Western Nepal for instance, the local government set up women only quarantine centers during the first wave of COVID-19 after a 31-year old woman was gang-raped while in a shared quarantine space, which should become a model for other towns. In Karnali province recently, the local parliament worked with us to collect data from returnee migrants and is now working to prioritize their concerns.

And in Panauti municipality, local officials are creating a databank of citizen needs so they can decide government plans and programs accordingly. Nepal recently moved towards a federal structure through which more power was devolved to the sub-national level- and we have to use this to engage citizens where government is closest to them; and to maneuver around the central government where that is necessary.

There is a famous quote that “people get the government they deserve”. The implication is that citizens have the power to improve government themselves. As Nepal finds itself the world’s next COVID-19 hotspot, there has never been a better time for citizens to do so.

Narayan Adhikari is the co-founder and Country Director of Accountability Lab Nepal; and Sanjeeta Pant is Programs and Learning Manager at Accountability Lab. Follow the Lab on Twitter @accountlab.