What Did the London Anti-Corruption Summit Achieve?

London, United Kingdom (TFC) – On 12 May 2016, David Cameron hosted the Anti-Corruption Summit in London. This summit aimed to bring together world leaders to discuss ways to expose corruption, punish those responsible, and to eliminate institutionalized practices that encourage corruption. I previously wrote an article explaining why this conference was unlikely to result in meaningful reform. So far, many civil society organizations have claimed that the Summit was underwhelming and did not go far enough. However, some positive steps were taken and as a result, I believe that it is worth exploring the end result of this Summit.

In the days before the Anti-Corruption Summit, tension started to brew as David Cameron was caught on camera stating that “Nigeria and Afghanistan are possibly the two most corrupt countries in the world.” This was expected to cause problems as the Nigerian and Afghani presidents were high profile invitees to the conference. Fortunately, this faux pas appeared to have been forgiven and the summit was able to proceed in a cooperative manner. At the Summit, several commitments and provisions were agreed to and published in a communiqué. Some of these provisions are as follows:

  1. The recovery of assets stolen through corruption: The communiqué recognizes that corrupt individuals can steal money from a state through corruption and then hide these assets in other countries. As a result, the communiqué made a commitment to return stolen assets. It also welcomed proposals by the UK and the United States to host a Global Asset Recovery Forum to facilitate the return of stolen assets to their country of origin.
  2. Greater transparency in the awarding of government contracts: The communiqué recognizes the need to ensure greater accountability and transparency in government contracts to avoid the theft or misuse of public money. The UK endorsed this provision and promised to open the government contracts process to the public.  Under this plan, the public would be able to monitor all stages of the government contract process by October 2016. The British government also agreed to bar companies that have been convicted of engaging in corrupt acts from being awarded government contracts.
  3. The protection of whistleblowers: The communiqué stated that whistleblowers are vital for uncovering corrupt acts and should be protected from retaliation. It also recognized the role that journalists, the media, and civil society organizations play in uncovering corruption.
  4. Information Sharing: The communiqué emphasized the need for the automatic sharing of tax information between countries. This is important for cracking down on tax havens because they rely on secrecy to help people hide their assets from their home countries. If a country were required to share tax information with other countries, then it would not possible for them to act as a tax haven.  To increase information sharing, the Summit endorsed the Common Reporting Standard, which is a mechanism that provides for the automatic sharing of information regarding the assets and incomes of the residents of a country. This would allow countries to determine if their citizens are hiding assets in tax havens and force them to pay taxes on the amount that is kept offshore.
  5. Punishing those who facilitate tax evasion: The communiqué promised to punish attorneys, real estate agents, financiers, and other actors who help to facilitate tax evasion and corruption.
  6. Use technology and data to crackdown on corruption: The communiqué recognizes the role that technology and data have for cracking down on corruption. To support this objective, the UK has agreed to start an Anti-Corruption Innovation Hub with the intention of harnessing civil society, the private sector, and law enforcement to expose and tackle corruption
  7. Eliminate corruption from sport: The communiqué aims to combat corruption in sport like match-fixing, illegal gambling, doping, and the improper awarding of contracts.
Symbols of bribery. Image source: MediaPhoto.Org

Symbols of bribery.
Image source: MediaPhoto.Org

Many provisions and commitments have emerged from the Anti-Corruption Summit. Many of these appear to make progress towards combating corruption. The communiqué stated that some of these provisions should be enforced through established mechanisms like the Sustainable Development Goals and the UN Convention Against Corruption. This is important because, if done successfully, it would obligate the wider international community to comply with these provisions, which is vital for stamping out international corruption.

There are, however, several weaknesses with these provisions. The most notable problem is that these provisions will not successfully clamp down on tax havens, which facilitate corruption. The provisions related to information sharing are supposed to address this problem. However, the Common Reporting Standard, which is the mechanism that is used to promote information sharing, has only been adopted by 47 countries. This means that much of the world, including the United States, will not be participating in this information sharing scheme. This is problematic because, in order to clamp down on tax havens, all countries must be obligated to share tax information. As a result, the Anti-Corruption Summit does not provide any meaningful way to clampdown on tax havens. This, in turn, would make it difficult to return stolen assets to their country of origin.

Another problem is that many countries have already agreed to some of these provisions but have failed to abide by them. For example, Luxembourg has strong whistleblower protection laws. However, despite this, it is prosecuting the people who are responsible for releasing and publishing the Luxembourg Leaks, which exposed companies that were engaging in tax avoidance in the country. This demonstrates that if the Anti-Corruption Summit is to have any meaningful impact, then countries need to actually abide by its provisions. This is problematic because the Summit did not create enforcement mechanisms that could be used to ensure compliance with the communiqué. As a result, it is likely that some countries will renege on the commitments that they made at the Summit.

The London Anti-Corruption Summit has put forth many promising provisions for combating corruption. I believe that this represents a step in the right direction. However, these provisions undoubtedly have their shortcomings and their effectiveness depends entirely on the way that they are implemented. As a result, corruption will remain a major problem and the international community will need to do much more to eliminate it.