Anti-Corruption
Can we realistically fight corruption?
This article has been adapted from the Bond Anti-Corruption Group’s Position Paper. The group have also produced some Anti-Bribery Principles and Guidance for NGOs.
About corruption
Corruption has devastating effects on developing economies and their citizens’ quality of life. It fundamentally undermines the achievement of the Millennium Development Goals. In developing countries for example, corruption raises the cost of connecting a household to a water network by as much as 30%. According to a recent survey in Kenya, 87% of respondents had witnessed the payment of bribes to connect to the capital city's water network, and a seven-country study in Africa showed that 44% of parents canvassed had to pay illegal fees to send their children to school.
Corruption undermines economic growth rates and cripples public services, as money which should be destined for investment and public expenditure finds its way into private bank accounts. Research consistently shows that corruption remains one of the major impediments to poverty alleviation, and is a proven source of conflict and insecurity.
Global complicity
Corruption is often thought of as just a developing world problem, but it is driven and facilitated by external actors, many of them in the developed world, for example:
- Anyone – company, development NGO or tourist - can actively fuel corruption by paying bribes.
- Donor aid does not always adequately tackle corruption and promote accountability and transparency in highly corrupt aid-recipient countries.
- Banks can sustain corruption by doing business with corrupt officials and accepting looted funds or bribes.
What can be done?
Tackling corruption can seem intimidatingly complex. But the good news is that it can be done. The Bond Anti-Corruption Group recently published a position paper containing 33 recommendations for practical actions the UK government could undertake that would tackle both the demand-side (ie, those who request bribes, often public officials) and the supply-side (ie, those who pay bribes or provide services that support the system of bribe-paying) of corruption. Two topical issues are the new UK Bribery Act, and the problem of money laundering. This has a special relevance for the UK due to the role of London as an international financial centre and the fact that several of the British Overseas Territories, such as the Cayman Islands, are notable for their financial secrecy.
Cutting off the ‘supply-side’
Bribery is the most obvious and best recognised form of corruption. For more than a decade, the UK’s antiquated anti-bribery laws were not compliant with the OECD Anti-Bribery Convention, but in April 2010 a new Bribery Act received Royal Assent. It is one of the most thorough and wide-reaching such laws in the world. Vested interests, who wish to continue business as usual, have continually tried to block or delay the Act, and the Bond Anti-Corruption Group has been acting as an important counter-balance in the public debate. The Act came into force on 1 July 2011.
Read more about the Bribery Act.
Money laundering
Money laundering is the counterpoint to corruption. Just as a bribe cannot be taken without a person willing to pay it, large scale corruption cannot take place without a financial institution willing to accept or process the money. In this context, the activities of British banks and Overseas Territories, along with failures in regulatory frameworks, can seriously undermine development and the effectiveness of aid provided by the UK and other donors. The Bond Anti-Corruption Group has been pressing for better regulation of banks and greater action through the Financial Action Task Force, the inter-governmental body that sets global anti-money laundering standards.
Read the response from the Home Secretary, Theresa May, June 2011
