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Anna Hazare Fighting Corruption in India

 

Q: How many hours do you think it would take to spark a peaceful national movement inspiring over a billion people to compel their government to stamp out corruption?
A: 98.

Q. And how much food would you consume in those 98 hours?
A. None.

Sounds pretty spectacular doesn’t it? It’s exactly what Anna Hazare, a 71 year old Indian civil activist from India did just last week. Fed up after decades of experiencing rampant corruption Anna decided that the only way to make the government listen was to go on a hunger strike.

Until his demands were met. Or, until his death.

From April 5 till April 9 Hazare fasted. And in those five days a peaceful revolution took place. All over India people took to the streets campaigning in solidarity with Anna calling for the government to pass the Jan Lokpal Bill. This would create an independent body which will have the power to prosecute politicians and bureaucrats without government permission.

As inspiring as his individual deed is it is the peaceful revolution that has occurred within India over the last week that is the greater story.

The scale of what ordinary, everyday people in India have had to endure as a result of corruption is astonishing.

As Kailash Chand in the Guardian outlines,

Over the past six decades, the four pillars of democracy, the legislature, judiciary, executive and the press, have all developed serious problems in India. The rule of law stands subverted and moral values seriously eroded. The civil rights of women and children suffer blatant violations. Daily newspapers are replete with news of rape, dowry-deaths, trafficking, abduction and murder. The weak, the elderly and those living alone are robbed and killed every day. The police authorities prefer to look the other way. Attempts to lodge complaints with them are simply stonewalled unless some activist take the cudgels of justice in their hands. Members of the hallowed corridors of the law courts have succumbed to the temptations of underhand deals. Shanti Bhushan, a leading lawyer, claimed that half of the 16 supreme court chief justices before whom he had appeared were corrupt.

If that isn’t bad enough, one more statistic is the fact that in Bangalore (a city in the South East of India) the average patient in a maternity ward pays approximately US $22 in bribes to receive adequate medical care.

$22 may not sound like much. But for the over 450 million Indians who currently live on or less than US $1.25 a day that amounts to around 3 weeks wages.

That’s why we at the Global Poverty Project are excited to see Anna Hazare, along with millions of his fellow Indians, peacefully demand that the Government stamp out corruption. As they have experienced firsthand, corruption undermines their ability to lift themselves out of poverty.  

Posted by Perrin Wilkins (Corruption Campaigner) in Corruption & Governance for column Success Stories on Apr 12th 2011, 11:32

UK Bribery Act: Alive, but perhaps not kicking

 

On Wednesday the Government released guidance notes for the Bribery Act. This is terrific news.

We now have a Bribery Act and it will be coming into force on July 1. It is the first update to the UK’s anti-bribery legislation for over 100 years. We at the Global Poverty Project welcome the government’s announcement and we thank you for campaigning with us to have the guidance notes released.

In our campaign to have the guidance notes published over 300 of you sent emails to the Justice Secretary and No 10. They have listened.

Despite this positive outcome we nevertheless hold grave misgivings regarding the guidance notes.

According to the Justice Secretary the reason for the delay was due to the Evening Standard stirring him into action. As a result of this last minute lobbying from business groups, the guidance notes go far beyond a simple watering down of the Act. In fact the guidelines undermine both the spirit and intent of the Act which, after all, was originally passed under an all party consensus in November last year.

So here’s the result.

Originally the Act introduced two new offences. First, it became illegal to bribe a foreign public official. Second, a company would be guilty of bribery where it failed to prevent bribery occurring on its behalf.

Both of these crimes have now been completely undermined by the guidance notes. They open a huge loophole that allows companies to use subsidiaries to pay bribes to foreign public officials.

In addition, the guidance also exempts foreign companies listed on the London Stock Exchange from the remit of the Act. As long as they ‘carry on their business’ elsewhere, they won’t be covered by the Bribery Act. This is in direct contradiction to the Act.

According to Ken Clarke, ‘without changing the substance of the act’ the new guidelines represent a common-sense approach to tackling bribery. That’s the copout. He hasn’t had to change the substance to undermine and change the intended meaning of the Act.

Indeed, we now have a situation where the government’s guidance notes – their view of what the Act means in practice – contravenes a plain reading of the Act. It’s a capitulation to business interests and their intense lobbying campaign. It’s no surprise then to see the Confederation of Business Industry, the self-declared ‘voice of business’, welcome this ‘much-improved’ guidance.

Lobbying from vested interests and business groups has now undermined an Act that would have placed the UK as a leader in the global fight against corruption.

Lobbying from vested interests and business groups has undermined the democratic process. Just last year the Act was passed with a cross-party consensus. And more than that, the Act was passed just before the election in April. That’s right – moments before the parties were about to begin competing they came together recognising the need for a strong, broadly focused Act to fight corruption and defend British businesses that want to operate to a fair, ethical standard.

And it was passed following an extensive consultation with the business sector to begin with.

It’s no surprise to see the response from our friends at Transparency International and Global Witness. They both consider the Government’s guidance to be a white flag to last-minute lobbying - the result of which has opened up numerous loopholes in the Act.

Neither of them mince their words.

According to the Executive Director of Transparency International Chandrashekhar Krishnan the guidance notes are deplorable reading more ‘like a guide on how to evade the act’.

Global Witness is equally enraged considering the guidance notes to be a reprehensible cave in by the Government.

But it’s not all over yet.

Fortunately, Ken Clarke isn’t responsible for enforcing the Act.

In fact that role falls to the Serious Fraud Office (SFO). The SFO is an independent government department responsible for fighting major fraud and corruption in the financial system. In other words, they’re responsible for enforcing the Act against the companies that have been courting Ken Clarke.

Led by their Director Richard Alderman, they take a different view to the Ministry of Justice on the Bribery Act. They see it the way it should be seen.

According to Richard Alderman the SFO isn’t concerned with an ‘over-technical’ interpretation of the new law. Rather, the SFO views itself as having a wide jurisdiction to enforce the Act and ensure that ethical UK businesses are not disadvantaged by unscrupulous competitors.

And that’s what this is about.

Ultimately, we at the Global Poverty Project want to see UK businesses succeed on the basis of their high ethical standards. We recognise that business has a crucial role to play in the fight against corruption and we want our businesses to be world leaders in this. Corruption perpetuates and exacerbates poverty. It is a cancer and it requires all of us – individuals, governments and businesses – working together to combat it and end extreme poverty.
 

Bribery Act - Just days away?

 

Over the weekend the Telegraph reported that the Bribery Act’s guidance notes are just days away from being released. Under pressure from the US government and the Organisation for Economic Co-operation and Development the government is now expected to publish the guidance notes by the end of this week.

Whilst we’re happy to finally hear that the guidance notes are to be published, the government’s delay has been highly worrying. Passed under an all party consensus under Labour and receiving Royal Assent in April last year, the Bribery Act is long overdue.

As we’ve blogged, the Act has come under significant lobbying and criticism from the City of London, business groups, the London Stock Exchange and, not surprisingly the multinational chairman’s group whose members, according to the Guardian include BP, Shell, Diageo, Unilever and Vodafone. Indeed, John Cridland, the director-general of the Confederation of Business Industry, or as his biography describes himself, ‘the voice of business’ has argued that the Act is ‘not fit for purpose’.

What about the voice of those who suffer the cost and consequences of bribery?

Let’s not kid ourselves, bribery is real, serious and disastrous. It is fair that the government hears all sides concerned but it is of vital importance that all voices in the consultation period are heard.

That is what we, with you, have endeavoured to do. It is our goal to give a voice to those who believe that bribery, in all its forms, should be stamped out. It’s our government, and we deserve a say in how it operates and who it listens to.

And that is what the Bribery Act campaign is about. It’s us, ordinary everyday people, joining together to take a stand- to hold our leaders to account and to demand a better standard of accountable, ethical, governance. We don’t tolerate bribery in our personal lives so why should the government allow our businesses to operate in such a way?

With the Bribery Act, the Government has an opportunity to become a leader in the global effort against corruption. It’s an opportunity it shouldn’t waste.

That’s why we at the Global Poverty Project, along with our friends at Transparency International believe that the guidance notes, which form the basis of the Bribery Act, should be released without amendment and that the Act should be implemented as soon as possible.

That’s why over the past few months we’ve written blog articles, sent out numerous email campaigns, and worked closely with Transparency International in keeping a close watch on the government.

And now, we’re about to find out.

We will continue to keep you informed and updated as to the content of the guidance notes. We expect that with the release of the guidance notes the Government will demonstrate with action, and not words, its commitment to combating bribery and the corrosive effect it has on society, business and most importantly those who suffer its’ effects the most – the poor.

 

Corruption: not Top Secret, or extensive

 

 

Today, headlines around the country loudly declared "Australia's foreign aid program hit by massive fraud", as News Ltd reporter Steve Lewis drew attention to the 175 cases of fraud currently under investigation by Australia’s foreign aid agency AusAID.

This media investigation drew attention to the very real problem of corruption in many countries that receive funding as part of Australia’s overseas aid program. However, the piece quickly dismissed the fact that AusAID has detected these incidences of corruption and is currently investigating them - a tribute to the robust fraud detection systems that they currently have in place. 

The director of AusAID Peter Baxter notes that, “To claim that the AusAid program is riddled with fraud or that the vast majority of the aid program doesn’t actually reach its target is factually incorrect. We work in some of the most difficult environments on the planet, including in countries where corruption is endemic and of course there is a correlation between countries that have problem with corruption and poor government and poverty. Investigating fraud in those environments is difficult but we do that.”

While  today’s article rightly noted that corruption is a real issue in delivering our foreign aid, it failed to highlight three important points: 

1. AusAID has effective systems in place

AusAID has checks and balances in place to prevent, detect and investigate fraudulent behaviour. These mechanisms include the recent creation of the roles of Chief Auditor and the Director of Fraud Control within the department; risk and fraud management plans at overseas posts; transparent public tendering; promotion of the United Nations Convention Against Corruption, and sponsorship of the Extractive Industries Transparency Initiative(EITI). 

It is because of these checks and balances that we know of the aforementioned cases of fraud. 

2. The reported incidence of fraud is less than 0.1% of the entire budget 
 
Lewis alleges that the cases of fraud under investigation demonstrate that Australia’s aid program is wrought with corruption. In actual fact, of the $20 billion allocated to foreign aid since 2004-05, there are estimated to be potential losses of $3.4 million.  This represents only 0.017 per cent of the budget.

When compared with Australia’s Centrelink program, which has an anti-fraud success rate of 96.5 per cent (considered a successful result against their target of 95 per cent), Australia’s foreign aid program is 206 times less fraudulent.

3. Corruption is real. We need to fight it, not run from it

In the fight against extreme poverty, corruption is a significant issue. But it's important to ground our analysis in the reality that if we want to reduce its impacts on our developing neighbours, we need to continue to support foreign aid.
 
This isn’t to say that we shouldn’t monitor the spending of aid very closely, nor that we shouldn’t  continue to urge the government to improve the effectiveness of its aid program, in fact, aid effectiveness is crucial to tackling corruption - because it allows us to maximise our impact tackling the systemic issues that exacerbate issues related to corruption.
 
But we shouldn't use corruption as an excuse to reduce our efforts to provide opportunities to the poorest people on our planet.

 

Robbery and Africa's Missing Millions

 

Last week I was robbed. Out for a drink on a Wednesday night with my friend I ended up going home that evening £2000 poorer. With my backpack stolen I lost my laptop, ipod, jacket and a number of other accessories.

It’s not something I’d like to occur regularly however it made me realise a few things.

First, I went straight to the police station. I made a report, listed the items stolen and received a case number. My details were even referred to a ‘victims of crime’ charity support group. Second, I sent off my insurance claim. Fortunately, I had backed up my all my work and now it’s a matter of waiting to hear from them.

Here’s what I learnt:

  1. Always watch your bag.
  2. I’m fortunate it happened here.

Living in the UK when such an event takes place we are able to call on the resources of others. We have options and opportunities that enable us to solve our problems. We’re empowered citizens.

Having my personal items stolen I felt, beyond loss, frustration. My laptop is my mobility. Technologically, socially and professionally I use it everyday to skype, work and relax. With it gone, I felt incapacitated - that I couldn’t achieve what I would like to. In short, it’s simply an inconvenience to try and work without it.

But that is all it is. An inconvenience - nothing more. I’m insured. I will be duly compensated. Ultimately, I have agency – the opportunity and ability to change my situation.

My experience cannot compare with those who live in extreme poverty. What is to me an inconvenience e is unfortunately the reality for many. It should not and it need not be like this.

When it comes to grand theft, robbery and corruption the citizens of developing countries suffer immensely. The previous evening the Africa All Parliamentary Group along with the Royal African Society hosted Dev Kar, a lead economist at Global Financial Integrity, who presented the findings of his report on Africa’s Missing Millions.

The figures detailed were astonishing.

Kar calculated that between 1970 and 2008 Africa had lost $854 billion in illicit financial flows. That was the conservative estimate. The most generous estimate put the figure at $1.8 trillion. To put that in perspective, Africa has a population of 1 billion. This means that every single citizen in Africa has effectively lost between $854-1,800 dollars. In other words, they’ve all been robbed of their own laptop.

How does this happen?
Through the flow of money that is illegally earned, transferred or utilised. In short, illicit money. As we blogged recently, Hosni Mubarak is a textbook example. As leader of Egypt for over 30 years he abused his office to privately benefit at the expense of his people. Using his position Mubarak built a personal fortune estimated to be in the region of $70 billion.

But here’s the catch. It’s not just corrupt governments that are privately benefiting from this outflow of money. Kar’s report concluded that total outflows from government officials in the form of bribery and theft represented only 3 percent of the global total.

Rather, the main culprits are large Western, yes Western, multinational companies. Through the proceeds of tax evasion, mainly through commercial trade mispricing, Western companies contribute a staggering 60-65 percent of the global total of illicit financial flows .

How is this possible?
To quote:

This massive flow of illicit money out of Africa is facilitated by a global shadow financial system comprising tax havens, secrecy jurisdictions, disguised corporations, anonymous trust accounts, fake foundations, trade mispricing and money laundering techniques.

In other words: our financial systems.

And who suffers the most from this? Once more, straight from the report:

It has its greatest impact on those at the bottom of income scales in their countries, removing resources that could otherwise be used for poverty alleviation and economic growth.

What the report academically refers to as those at the ‘bottom of income scales’ = the poor.

This problem is huge. It’s bigger than aid. Dev Kar estimated that for every one dollar given in aid to Africa, three returns under the table. And across all developing countries, it’s even worse. For every one dollar of aid, ten escapes.

Basically, if we’re serious about ending extreme poverty, we need to tackle this.

In the face of it all, what we can do?

For too long innocent citizens of developing countries have been robbed. This must change. And we have a critical role to play. Unlike us, they don’t have an effective recourse to effectively complain to. Theydon’t have a police station and an insurance company to lean on. This is where we can step in.

First, to understand how this system operates and who benefits we need to get educated.

Read.

A great place to start is Nicholas Shaxson’s just published book ‘Treasure Islands: Tax Havens and the Men who stole the World’. His book details the murky and little known world of tax havens and the central role they play in the global economy and importantly, in keeping people poor.

The good: it reads like a thriller. The bad: it’s all true.

Talk.
Share the book with your friends. Have conversations.

Get active.
The answer is simple and the solutions are straightforward. Unfortunately, getting there will be one long, hard fight. But we’re committed to this. The Global Poverty Project will be campaigning on this as it is the key to solving extreme poverty and if like us you feel outraged join our movement and add your voice to the chorus of those calling for change.