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January
7, 2004—On
December 11, 2003, more than 90 countries signed a landmark
treaty: the UN Convention on Anti-Corruption. WBI’s
Director of Global Governance Daniel Kaufmann made an opening
plenary statement (20
kb PDF) at the meeting in Merida, Mexico, and the Bank
participated in a number of panels and workshops.
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| l
to r, Daniel Kaufmann, Director,Global Governance, WBI,
Eva Joly, Special Adviser, Ministry of Justice, Norway,
Tim Wall, UN Department of Public Information, Ramesh
Lawerence Maharaj, Former Attorney General, Trinidad
and Tobago |
The
Convention,
which would enter into force once ratified by a minimum
of 30 states, requires countries to criminalize a range
of corrupt activities and take action to promote integrity
and to prevent corruption. It also establishes for the first
time, legal mechanisms for the return of looted assets that
have been transferred to other countries.
At
a press conference on December 10 in Merida, a benchmark
figure for the dollar value of worldwide corruption was
put forth. By very rough but conservative estimate, Kaufmann
told the briefing, income derived from illicit transactions
may account for three-to-five per cent of the volume of
total global output. Bribes may account for at least one
about half of that amount. A low figure for the dollar amount
paid out each year in corrupt transactions would be about
$1 trillion, out of a gross world product of US $33 trillion.
He also highlighted the research findings pointing to the
very large ‘development dividend’ that can result
in the long run in terms of higher incomes per capita from
a moderate improvement in controlling corruption, which
is estimated in the tune of 400 percent (and similar declines
in infant mortality).
Kaufmann
spoke with Today about the significance of the Convention
for the world and for the work of the World Bank.
Why
is the signing of a UN treaty on anti-corruption important?
It is
unprecedented. This Convention is the first global legally
binding instrument to fight corruption. In fact, the UN
had tried for decades to initiate such a process towards
consensus on anti-corruption, but failed. The time was right
as many institutions, including the Bank had raised awareness
of the debilitating effects of corruption on a nations’
development and growth. Over the last three years, the UN
has worked hard to get the Convention off the ground. The
Members States succeeded in bringing about the adoption
of this Convention, by a resolution of the General Assembly
at the end of October. And now in Mexico, over a 100 countries
and major multilateral organizations were evidence to the
signing of this Convention by over 90 countries. Kenya did
more than that—it immediately ratified it as well.
Why
now?
The
time was right. There is a sea change taking place where
people are increasingly demanding democratic accountability
and transparency. This, together with the explosion in empirical
work codifying the extent and costs of corruption (which
was regarded as ‘unquantifiable’ only a few years
ago), and the IT revolution enabling global and instant
access to information and data created the right environment
where such a Convention could be accepted. The positive
effect the Bank has had in putting this issue on the international
agenda as a major developmental challenge, which Jim Wolfensohn’s
launched in his 1996 annual meeting speech, was recognized,
and explains why the Bank was asked to present a statement
in the plenary of the very first day of the convention.
The
Convention is a formal framework for international cooperation
and domestic actions at all levels to prevent, fight, prosecute,
and control corruption and the problems stemming from such
corruption. The limited regional instruments that were in
place did not cover provisions such as asset recovery and
prevention, which this global convention encompasses. In
particular, countries who ratify the Convention must:
- establish
criminal offences to cover acts of corruption;
- cooperate
internationally to prevent, investigate and prosecute
corruption through gathering evidence, extradition
and tracing, freezing, seizing and confiscating the proceeds
of corruption;
- aid
in asset recovery through the prevention and detection
of transfers and the recovery and return of assets (illustrating
the importance of this dimension, note the very recent
breakthrough in terms of Switzerland agreeing to collaborate
in returning looted funds by the Abacha regime in Nigeria);
and
- take
the first step toward tackling corruption: prevention,
in both the public and private sectors, through the establishment
of anticorruption bodies, enhanced transparency and accountability,
and due diligence programs.
Does
the Convention bode well for attaining more concrete progress
on the ground in controlling corruption in the future?
Cautious
optimism with a dose or realism is in order, of course.
Let us keep in mind that globally progress has been mixed
and halting overall in recent years. Political expedience
and vested interests unfortunately still plays a key role,
in many industrialized and emerging economies, and they
are likely to prove an important force attempting to slow
the progress aimed at by those in governments and civil
society that are seriously committed to anti-corruption.
In terms of the convention itself there are specific challenges
ahead as well First some countries have yet to sign the
convention. Then, signatory countries need to go through
their internal political process to ensure ratification
by their legislatures. Thirty signatory countries are required
to ratify the convention before it can enter in force, which
is hoped to be achieved within a year. After ratification
of the Convention, an already-established Conference of
States Parties will promote and review monitoring and implementation.
As usual, the ‘devil will be in the details’,
since the particular monitoring and implementation mechanisms
(still to be fully worked out) will need to have ‘bite’
and provide incentives for concrete implementation at the
country level.
How
may this affect the work of the World Bank?
We will
all continue to push the envelope in promoting good governance
and anti-corruption, and hopefully the commitment at the
global and country level implied by this convention will
contribute to future successes in our assistance to countries.
Further, we are expected to collaborate with the UN on some
particular dimensions in the next stage of the work. A number
of countries at the Conference noted in their official statements
the support already provided by the Bank, while others expressed
interest in benefiting from such assistance in the future.
The interdisciplinary and institution-wide approach that
the Bank Group is increasingly taking on this issue should
pave the way for increasing effectiveness in our assistance
to countries as well as specialized partnerships with various
UN offices and other such organizations. It is indeed crucial
that we fully recognize in our work that good governance
and anti-corruption is not an insular ‘sectoral’
challenge that can be divorced from other development themes;
instead it is an umbrella issue that intertwines legal,
financial, corporate and public sector components of relevance
for outcomes in key traditional sectors (e.g. health) for
capacity enhancement, and for poverty alleviation. Thus,
in the next stage we need to scale up our work across themes
and units Bank-wide, taking in the institutional change,
political, financial (such as AML), private sector (including
the private-public sector links), subnational (including
urban), and human rights dimensions as well. Explicit integration
of these issues into CASs and lending selectivity is also
of importance. And we also need to scale up a systemic approach
to anti-corruption that focuses on prevention and altering
incentives in key institutions, and on monitoring rigorously
through the ‘power of data’, all integrated within
a broad-based governance and institutional reform framework.
One does not fight corruption by fighting corruption—merely
prosecuting an individual, or declaring another anticorruption
campaign, redrafting another anticorruption decree, or establishing
yet another anticorruption commission.
The
Bank’s representation at Merida shows the breadth of
effort across the Bank Group on this issue. Bess Johnson
Michael, an expert on Anti-Money Laundering (AML) was invited
to present at a special panel on Measures to Fight Corruption
in National and International Financial Systems; William
Reuben, a specialist on Civil Society participation, presented
at a special panel on The Role of the Civil Society and
Media in Building a Culture against Corruption; and John
McCormick, an expert on investigative techniques, presented
at a special meeting on the Inter-Agency Group on Anti-Corruption
Coordination (IGAC) and its role in promoting the UN Convention
against Corruption. His presentation was on World Bank-Multi-agency
collaboration in Fraud and Corruption Investigations, reflecting
the work (and longstanding collaboration with the UN) by
Maarten de Jong’s investigation and integrity group.
Click
here for more information on the
Convention and the World Bank’s role in the Merida
meeting.
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