29 June 2012, by Angela McClellan, Transparency International.
The powerful forum of the G20 countries who account for 85% of the world economy had their annual summit this year in Los Cabos, Mexico on 17 – 18 June. Mexico is the second emerging economy following South Korea in 2010 to host the gathering. Interestingly, with the Eurozone crisis at the centre of attention, the summit reflected an increasing shift of power towards the BRICS countries: Brazil, Russia, India, China and South Africa. This is underlined by the fact that the US was the only country not to contribute to the increase of IMF funds, which was decided at the meeting, whereas even South Africa committed resources. While South Korea during its presidency had pushed for development issues to be added to the G20 agenda, Mexico focused on the G20 financial and economic reform process and emphasized green growth in advance of the Rio+20 Summit.
By extending the mandate of the G20 Anti-Corruption Working Group for another two years, the G20 have acknowledged the importance of anti-corruption in the process of stabilizing the global economy. Made up of anti-corruption experts from all G20 countries, this group has proven to be a valuable forum to tackle cross-border corruption issues including money-laundering, restitution of stolen assets and foreign bribery. Its Action Plan is based on the UN Convention against Corruption (UNCAC) as a legal framework. Together with the UNCAC Coalition and other civil society organisations, TI has been monitoring G20 progress on anti-corruption and has coordinated several civil society submissions to the group, the latest one in February of this year.
What has been achieved? As a result of the combined pressure from the UNCAC review process and the G20 Anti-Corruption Action Plan several G20 countries have implemented related UNCAC provisions and made progress in the criminalisation of foreign bribery: New legislation has been passed in China, Russia and is going through parliament in India and Indonesia. The OECD has been instrumental in achieving the Russian accession to the OECD Convention Against Foreign Bribery. To demonstrate that they are serious about combating foreign bribery, G20 countries now have to step up their efforts to enforce relevant legislation. In addition, new whistle blower protection legislation has been passed in some countries, such as South Korea. The G20 committed to pass whistle blower protection regulation in all its member countries by the end of the year. Whether this will actually happen shall be monitored. Follow-through on fighting corruption remains uneven: three G20 members have yet to ratify the UN Convention against Corruption — Germany, Japan and Saudi Arabia.
In fighting financial crime, the G20 have committed to the Multilateral Convention on Tax Information Exchange. Tackling the issue through a multilateral convention as opposed to numerous bilateral conventions is a positive step, but the convention can only be effective if it is signed by tax havens and developing countries. Furthermore, the G20 have renewed the mandate of the Financial Action Task Force (FATF) and revised its standards, which is an important step for legal and prosecution purposes.
The Anti-Corruption Working Group has also agreed on principles for visa denial to corrupt officials and “those that corrupt them”, referring to intermediaries. If effectively implemented, denial of safe havens can be a powerful deterrent. In addition, they have agreed on best practices for asset declarations of public officials. With regard to restitution of stolen assets the G20 have agreed to publish a guide on mutual legal assistance procedures to facilitate relevant processes. In this regard the G8 have come up with a comprehensive framework.
In sum there is some progress on anti-corruption at the G20 this year, but continuous monitoring and lobbying, in particular at national levels, will remain necessary for relevant policies to be implemented. Acknowledging “useful input received” from civil society and others, the G20 countries agreed to develop procedures for enhanced outreach and to improve the “transparency and effectiveness” of their procedures. It remains to be seen how the Russian G20 Presidency in 2013 will take this forward.