London, United Kingdom (TFC) – On 12 May, 2016, many world leaders will meet at a summit in London to discuss corruption. The objective of this summit is to foster international cooperation for combatting corruption. Since this is occurring in the aftermath of the Panama Papers, the summit is coming at a very opportune time when this topic is still salient amongst the public. However, while this summit has noble objectives, many have expressed skepticism towards it.
On 8 May 2016 Downing Street published a statement from David Cameron about the summit. This statement, which recognizes the myriad of poverty and security-related problems that corruption causes, stated Cameron’s desire to formulate and implement the first global declaration against corruption and mechanisms for combatting it. In the process, David Cameron set lofty goals for international cooperation to engage in anti-corruption efforts. To this end, David Cameron invited many prominent heads of state to his summit, the agenda of which includes exposing corruption, punishing those responsible, and eliminating cultures of corruption. The British government has expressed optimism that this will lead to meaningful anti-corruption reform.
However, this Anti-Corruption Summit has also received a fair amount of skepticism from the public and civil society organizations. Transparency International, an anti-corruption watchdog, has raised concerns that this summit could turn into a non-transparent closed-door meeting between global leaders. Other critics of the summit would also rightfully point out that many in attendance stand to lose the most from any meaningful anti-corruption agreement. For example, David Cameron, who is hosting the summit, has himself been implicated in the Panama Papers. Furthermore, many of the attendees are leaders of countries where corruption is rampant among the political and business elite, which means that they would almost certainly face opposition to meaningful anti-corruption efforts from their peers. This has prompted economist, Jeffrey Sachs to claim that:
“I think these governments don’t really want to do much because their powerful backers, whether it is in the city of London, or on Wall Street, are fighting very, very hard to keep these loopholes open … This is a system that has been created over time for the convenience of very rich and powerful people. There is no more direct example of how the rich and the powerful really control the levers of finance than these tax havens.” – Jeffrey Sachs
In light of this, it is worth asking what the world can reasonable expect to see from this summit. So far, civil society organizations have proposed several measures including protection for whistle-blowers, stronger due diligence requirements for law firms, the sharing of financial data between countries, and the publication of registries that track the ownership of companies. However, prospects for reaching an agreement about these measures and actually implementing them are unclear.
These issues aside, the main problem with the Anti-Corruption Summit is that it is not inclusive of all countries. Many countries will not have a representative at this summit, which is problematic because they will not be bound any of the decisions made at the conference. This is especially problematic for clamping down on tax havens, which is vital for exposing corruption. As I previously wrote, tax haven countries are competing for their share of shadowy financial activities, which creates a “race to the bottom” in terms of financial regulation. As a result, if a single tax haven country is either not bound to international anti-corruption measures or fails to implement them, then this problem will continue. This demonstrates the need for all countries to have a seat at the table at the Anti-Corruption Summit.
While I believe that the Anti-Corruption Summit is a step in the right direction, more action is needed to effectively respond to corruption. The world needs to convene a summit that includes the entire international community to address these problems. Such a summit would have to be on a scale that is comparable to the Paris climate summit that was held in December 2015. This will invariably make negotiations more difficult as the greater number of actors would make it harder to reach a consensus. However, this would also ensure that any agreement reached would apply universally to all countries.
Overcoming corruption and the tax havens that facilitate it is an enormous challenge. The London Anti-Corruption Summit is a step in the right direction as it is a very high profile summit that will invariably put pressure on leaders to increase anti-corruption efforts. However, negotiating a commitment to combatting corruption and creating measures and sanctions to enforce that commitment will be difficult to achieve. In addition, greater international involvement is needed to bring about meaningful anti-corruption reform. As a result, I would not expect to see meaningful reform emerge from the London Summit. However, it does have symbolic value that could potentially spur more meaningful reform in the future.