Bond Anti-Corruption Group Submission to the Home Office on the Government’s Anti-Corruption Action Plan February 2014
The Anti-Corruption Group within Bond has the following core members: Article 19, CAFOD, Christian Aid, Corruption Watch, Global Witness, Integrity Action, ONE, Public concern at Work, Tearfund, The Corner House, and Transparency International UK.
Corruption causes damage to individuals, societies and economic development, both in the UK and overseas. It undermines public service delivery, accountability and the rule of law with devastating consequences for the most vulnerable citizens in many states. Dealing with corruption is inherently difficult. There are no quick fixes or one size fits all solutions. It requires cross-party political commitment that extends across successive governmental cycles and coordinated policy interventions across government departments. Over the last four years, the Bond Anti-Corruption Group has engaged with various government bodies on anti-corruption and transparency issues. We have welcomed steps that the Government has taken to pass the 2010 Bribery Act, to support the United Nations’ Convention against Corruption (UNCAC) review process, in co-chairing the G20 Anti-Corruption Working Group, and ensuring robust transparency legislation through the new EU Accounting Directives. The Bond Anti-Corruption Group enthusiastically welcomes the Government’s commitment to implement an anti-corruption action plan, as specified in the UK Open Government Partnership Action Plan in October 2013. The Bond Anti-Corruption group recommends that:
The Action Plan should include clear, measurable targets – encompassing the work of individual departments, and the coordination needed between departments in order to effectively tackle corruption. Concerted effort should be made to develop strategic cooperation between UK Government departments, bodies and organisations charged with investigating and reducing corruption and those tackling organised crime. In particular, we welcome the links the Government has made between international and domestic corruption, and we strongly recommend an integrated approach to ensure that each aspect, along with the problem created by their interface, can be effectively addressed. The mechanisms for coordination between relevant departments and bodies should be outlined in the Action Plan. A formal accountability mechanism should be introduced to review the work of the AntiCorruption Champion and the implementation of the Action Plan. We recommend that the Anti-Corruption Champion provides an annual report to parliament on her/his work and the implementation of the plan. This would allow Parliament and other stakeholders to
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judge what progress has been achieved, accompanied by an opportunity for Parliament to review or debate progress. The parliamentary report should be distinct from wider reporting on serious and organised crime and include, at a minimum, a written ministerial statement. Coordination of anti-corruption activity and the accompanying accountability mechanism should be formalised so that the process does not depend on the political will of those in post and will continue despite any changes in personnel that may occur. The Anti-Corruption Champion must have adequate resources and support in order to effectively oversee cross-departmental anti-corruption efforts.
The Bond Anti-Corruption Group recommends that the following thematic areas be included in the UK Government’s Anti-Corruption Action Plan.
Domestic corruption Corruption data Data on corruption should be collected and made publicly available according to the open data standards agreed by the G81. All corruption related data should be correctly identified as such and collated centrally in order to build a picture of corrupt activity across the UK. Reporting mechanism In a recent strategy document2, the Government committed to ‘agree a way forward’ for a corruption reporting mechanism for use by the general public. The Action Plan should set out a timeline for examination of the options, and eventual implementation, of such a mechanism. An education element should be included in the implementation plan in order to raise awareness of impact of corruption, and to publicise the new mechanism. Departmental and sector-specific risk assessments A corruption risk assessment should be carried out in a consistent manner for all government departments and agencies to determine which areas of the public sector, society and the wider economy are most vulnerable to corruption and why. Each department should be required to assess the level of corruption risk internally and within the sectors that fall within its remit. A summary of the risk assessments and associated mitigation actions should be published, and the assessments should be periodically updated. There should be a specific prioritisation of areas that are already clearly identifiable as high risk for corruption. These include prisons, the police, the border agency, local government, and sport. Parliamentary ethics A steady stream of political scandals has exposed a worrying vulnerability to corruption in UK politics. The Government should act to put a cap on individual donations to political parties and introduce tougher regulation of lobbying and the revolving door, as well as undertake a comprehensive review of the current system of ethical oversight of Parliament. In this respect the 1 2
G8 Open Data Charter (June 2013) https://www.gov.uk/government/publications/open-data-charter HM Government Serious and Organised Crime Strategy, page 61 (October 2013)
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BOND Anti-Corruption Group believes the Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act to be wholly inadequate. Whistleblowing The Public Interest Disclosure Act should be amended to authorise the Secretary of State, after consultation, to issue a code of practice on whistleblowing arrangements, and provide that such a code must be taken into account by courts and tribunals wherever it is relevant to do so. Regulators should consider how they gather information from whistleblowers and what treatment is given to those individuals. This includes ensuring that the organisations they regulate have effective whistleblowing arrangements. Regulators should also have a clear procedure for dealing with whistleblowers who come to them, including the provision of feedback and explaining when it is not possible or reasonable to do so. Freedom of Information The Government needs to extend the scope of the Freedom of Information Act to cover additional bodies and to ensure that any new rules on its implementation do not impose excessive limitations on those who are requesting the information.
International corruption and initiatives International forums The Action Plan should outline how anti-corruption is being prioritised in different international forums such as the OGP, G8, and the G20. The Government should work with G8 and G20 partner countries to keep anti-corruption high on the global agenda and report annually on the UK’s implementation of G8 and G20 anti-corruption commitments. UK overseas aid DFID is to be commended for its commitment to aid transparency, and we welcome the establishment of the Independent Commission on Aid Impact. The publication of the Action Plan offers an excellent opportunity for the Government to address public perceptions about corruption and development aid. While valuable, a focus on direct DFID funding is only one aspect of the intervention needed to deter and prevent corruption in the developing world. The UK government should consider how it can use its development assistance and political voice to lessen the cost of corruption overall in the developing world. The Action Plan should outline the preventative and reactive approaches that DFID is taking to tackle corruption, including how corruption is being tackled by the Official Development Assistance (ODA) that is channelled through different actors. Applying the same standards of transparency to all actors delivering the UK’s ODA would help to ensure this can be measured consistently. In addition, recipients of DFID grants should be required to follow the Bond AntiBribery Principles3.
3
Anti-Bribery Principles and Guidance for NGOs (June 2011) http://www.bond.org.uk/data/files/Bond_AntiBribery_Principles_and_Guidance_for_NGOs.pdf
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There should be cross departmental collaboration on UK presence in DFID priority countries. The plan should outline how DFID and the FCO can collaborate with BIS and UKTI to most effectively support British businesses operating in ODA target countries to tackle corruption. United Nations Post-2015 Framework The UK should continue to promote transparent, participatory and accountable governance as a cornerstone in the post-2015 framework. Open, inclusive, accountable and effective governance needs to be at the heart of the United Nations’ Post-2015 framework in order to maximise its effects on poverty and sustainable development. Compliance with the United National Convention against Corruption (UNCAC) The UK has a sound legal framework in place that complies with most of the relevant provisions of the UNCAC. Further enhancement is needed in the areas of anti-bribery enforcement, action against the facilitators of corruption, and public awareness of whistleblowing legislation.
The interface between domestic and international corruption Money laundering and asset recovery The role of the UK as a global financial centre and a destination for personal wealth has given rise to money from corrupt activity finding its way to and through the UK, often with the assistance of UK professional intermediaries. The Action Plan should ensure that the Government’s commitments to implement a public register of beneficial ownership are effectively reflected in the forthcoming legislation. The register needs to include information adequate to identify the beneficial owner, to contact them and to understand how they exercise control over the company. The information should be available for free as machine readable open data. In addition, the UK should implement the FATF recommendation that countries require nominee directors to disclose their identities and state on whose behalf they are working. The UK should take a lead in ensuring that its Crown Dependencies and Overseas Territories fully implement laws that are compatible with UK and international best practice, are sufficiently resourced to combat illicit financial flows, and do not allow for loopholes in the system which can be exploited. Specifically, the UK should use its influence to ensure that the Crown Dependencies and Overseas Territories adopt public registers of beneficial ownership. The Government should strengthen and improve procedures to help developing countries to recover looted assets and the proceeds of corruption that reside in the UK, by improving frontline defences in the private sector and considering a new law on corrupt enrichment. More resources should be allocated towards investigation and prosecution, specifically the City of London Police Overseas Anti-Corruption Unit and the Metropolitan Police Proceeds of Corruption Unit whose remit should be extended beyond the current scope of DFID priority countries only. The Government should ensure that the UK’s anti-money laundering laws are appropriately enforced. The UK should also work with stakeholders, including civil society, to develop adequate measures of success to evaluate whether the global anti-money laundering system is working as required by the FATF standards announced in 2012. This should include how to ensure proper personal accountability in cases where the system has not worked.
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Bribery The UK Government should ensure sufficient resources for enforcing the UK Bribery Act, particularly the Serious Fraud Office and the diplomatic posts, and include details on the resources allocated in the Action Plan. The UK Government should commit to extend the UK Bribery Act to all legal persons incorporated in the Crown Dependencies and Overseas Territories. This was a key recommendation made by the OECD Working Group on Bribery in a recent report4. The UK Government should adopt the OECD Working Group recommendation5 to commit to make public, where appropriate, as much information about Deferred Prosecution Agreements (DPAs) as possible. The Bond Anti-Corruption Group believes that a DPA should only be offered by prosecutors in exceptional cases, i.e. where a strong case can be made for the public interest factor. In the light of the recent Sentencing Council Guidance, the Government should be clear in its acknowledgement of the social and economic harm done by bribery. The Government should work with UK companies to promote collective action to raise anticorruption standards, notably in industries that are particularly vulnerable. The Government should administer and maintain a public register of companies that have been excluded from public contracts in any jurisdiction or by any international body following a conviction for bribery or other corruption offences. Extractive industries The UK Government played a leading role in the passage of the EU Accounting Directives last year and further demonstrated its commitment to tackling corruption in the extractives sector in the October 2013 National Action Plan under the Open Government Partnership. The Anti-Corruption Action Plan should include a commitment to implement promptly the EU Accounting and Transparency Directives into UK law. Through the UK’s membership of the Extractive Industries Transparency Initiative (EITI), the Government should support the development of open contracting6 and the disclosure of beneficial ownership for companies bidding for extractive contracts, and commit to concrete progress on open contracting across all UK Government departments. Defence The UK Government has been a leading actor during the Arms Trade Treaty negotiations, and also led on ensuring that the treaty contained strong anti-corruption mechanisms. The Government now needs to ensure that it improves its own arms export control anti-corruption systems.
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The Phase 3 Report on the United Kingdom by the OECD Working Group on Bribery evaluates and makes recommendations on the United Kingdom’s implementation of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and the 2009 Recommendation of the Council for Further Combating Bribery of Foreign Public Officials in International Business Transactions. It was adopted by the Working Group on 16 March 2012. 5 Ibid 6 http://www.open-contracting.org/global_principles
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