Speech by International Development Minister Stephen O’Brien at the Roundtable on Transparency, Accountability and Good Governance: The Future of International Development
I would like to thank Bright Blue and Tearfund UK for the invitation to this seminar. Transparency, accountability and good governance are fundamental to anti-corruption and I welcome the opportunity to tell you more about DFID’s work.
UK Commitment to fight Corruption
I want to start by making it absolutely clear that the Coalition Government is fully committed to giving robust leadership to the fight against corruption. It is a vital part of our development assistance work and we are committed to doing more with our partner countries, and doing more here in the UK and doing more with international partners
Corruption is bad for development, bad for poor people and bad for business. It causes huge damage to developing countries and wastes precious resources. We know, too, that poor people feel the effects more harshly than those who are better off. The uncertainties of bribery stifle business development and inward investment. And more widely, corruption corrodes the fabric of society and public institutions and is often at the root of conflict and instability.
At the heart of DFID’s work to tackle corruption is the recognition that in the modern world the problem of dealing with corruption cannot be confined within a country’s own borders. Corrupt money moves quickly. Combating it requires co-operation between countries’ investigators and law enforcement. Action to tackle corruption must be taken in partnership with developing countries; and action must be taken here in the UK and action must be taken with partners at the international level.
Action with our Partner Countries
In our partner countries, DFID’s programmes offer a wide array of assistance to help bear down on corruption. Traditionally, this has focused on strengthening institutions of governance; but increasingly this has broadened to include assistance to fight money laundering, to trace illicit financial flows and to recover stolen assets.
We know that the nature, intensity and shape of corruption will differ from country to country. Each country has unique challenges and unique capacities - or lack of them - to respond. So while there can be no single approach to anti-corruption, DFID’s actions are based on the appreciation that corruption thrives where certain conditions combine: where public institutions are weak and there is neither accountability nor respect for the rule of law - this provides the opportunity for corruption; where public service conditions are poor - providing the incentive to be corrupt; and where enforcement action is ineffective - which reduces the likelihood of detection and sanctions . The choices in any individual DFID programme will reflect an analysis of these factors in the country concerned.
In most DFID country programmes, a significant contribution is made to preventing corruption by supporting reform of public financial management. There is direct support to strengthening national audit offices in, for example, Ghana, Ethiopia, Sierra Leone, Tanzania, Uganda and Vietnam. DFID has also provided assistance to many anti-corruption commissions, for example, in Malawi, Nigeria, Sierra Leone, Zambia and Jamaica. We are now helping to increase investigation and prosecution capability in Nigeria and Tanzania, and supporting greater scrutiny of public expenditure through parliamentary oversight and civil society engagement in countries such as Bangladesh, Ghana and Kenya.
We are seeing results like these:
- DFID helped the Ugandan Government to address corruption in the public sector through stopping payments to 9,000 ghost workers - non-existent employees on payrolls. This has helped the Ugandan Government save up to £6m per year since 2005/06.
- In Malawi, support to the investigation and prosecution capacity of the Anti-Corruption Bureau has resulted in it prosecuting 25 major cases over the last 10 years involving over US$141m - of which US$80m has been recovered.
- In Nigeria, assistance to the Economic and Financial Crimes Commission in Nigeria has contributed to its ability to secure 52 convictions and the prevention and/or recovery of US$1bn in laundered funds.
Action in the UK
I now want to turn to what we do here in the UK to tackle corruption affecting developing countries. We have taken significant strides in tackling the problem of money laundering from developing countries; and in tackling corruption by UK nationals and companies which operate in developing countries.
This work is spearheaded by the two UK police units, both funded by DFID since 2006 - unique for a development agency - which trace, seize and recover illicit financial flows into the UK from developing countries, and which tackle bribery by UK companies or individuals in developing countries.
The Metropolitan Police Proceeds of Corruption Unit investigates allegations of money laundering by corrupt foreign politicians and officials (‘known as ‘Politically Exposed Persons’ (PEPs) through the UK. Since DFID funding started, there have been eight successful prosecutions. Overall, some £170m has been identified and is being held pending investigation and formal recovery. Some of this is money stolen by James Ibori, the former Governor of Delta State in Nigeria. He is now serving 13 years in a UK prison for his theft from the people of Nigeria.
The City of London Police Overseas Anti-Corruption Unit investigates allegations of UK citizens and companies involved in overseas corruption, especially foreign bribery. To date, there have been eight successful prosecutions, and the unit has around 25 cases currently under investigation, and a number of individuals charged and awaiting trial.
These units form the backbone of DFID’s approach that seeks to contribute at the key stages of the case management chain. Work is also in hand with the Serious Organised Crime Agency to better marshal and develop intelligence that can be used to inform programming decisions. At the other end, post-prosecution, the Department contributes to the asset recovery work undertaken by the Crown Prosecution Service to process confiscation orders and prepare for eventual return of stolen funds to the country of origin.
The support for the UK law enforcement system has proved its worth with considerable success both in terms of prosecutions and in recovery of assets, placing the UK at the forefront of this agenda internationally. This is a position that we are keen to maintain and are currently planning to expand.
In addition to this practical support for operational law enforcement, DFID provides the secretariat for the Government’s cross-departmental PEPs Strategy Group, chaired by HM Treasury. This brings together agencies concerned with PEP-related money laundering to improve coherence across Government departments in key areas such as intelligence, strategic assessments, improving the legal and regulatory environment and outreach and interaction with the financial services industry. This Group is proving an important vehicle for improving inter-agency collaboration and coherence on the international illicit financial flows that are the basis of money laundering.
The Department is also now investing time and effort in supporting collaboration between UK Government departments on the broader international corruption agenda which is led by the Prime Minister’s International Corruption Champion, currently the Justice Secretary. This enables DFID to ensure that the interests and concerns of developing countries are reflected in collective decision-making and priority setting.
Action at the International Level
Turning now to the international level, the UN Convention against Corruption provides an important transformative framework for co-operation between governments to tackle corruption. DFID invested heavily in the negotiations drawing up the Convention, in particular injecting a strong preventive theme to complement the criminal law enforcement starting point.
The global architecture for stolen asset recovery has developed strongly following the inclusion in the UN Convention against Corruption of obligations on developed and developing countries to collaborate on the tracing, seizing, recovery and return of illicit assets. To support the development of stronger knowledge on the obstacles to effective asset recovery, DFID has been a founding funder of the World Bank’s Stolen Asset Recovery Initiative which has generated a suite of valuable technical products for guiding policymakers and practitioners in this area. DFID is also a core funder, along with Switzerland and Liechtenstein, of the International Centre for Asset Recovery (ICAR) at the Basel Institute of Governance which provides practical case management advice to countries pursuing asset recovery. These two bodies have transformed the global framework for asset recovery in recent years, and provide developing countries with new avenues for technical assistance in all stages of the asset recovery process.
DFID also plays a central role with Ministry of Justice, in driving innovation within the G20 Anti-Corruption Working Group. Plans have been developed across the corruption challenge where G20 countries are committed to showing global leadership by example. These include: re-emphasising the centrality of implementing the UN Convention against Corruption; ensuring all G20 countries have effective laws against foreign bribery; strengthening cross-border collaboration on corruption and asset recovery; and - very innovatively, looking at ‘non-aid’ responses such as denial of travel and visas for corrupt persons.
We are now building on this by supporting the G20 Open Governance Partnership which aims to leverage faster progress towards open, transparent, accountable and effective governance.
Through other contributions to anti-money laundering technical assistance programmes by the World Bank and International Monetary Fund, DFID is now helping a range of developing countries to strengthen their anti-money laundering regimes. There is strong complementarity between this preventive work and the operational enforcement work undertaken through the World Bank’s stolen assets (StAR) initiative.
The UK is now internationally acknowledged to be a leader in international efforts to increase transparency in extractive industries which can be drivers of large-scale corruption in developing countries. The UK has supported the Extractive Industries Transparency Initiative (EITI) since its launch in 2002. This seeks to set a global standard for transparency in oil, gas and mining. This has led to over $500bn of government revenues being reported under EITI in 29 countries around the world and $130bn of revenues reported in Africa by over 150 companies.
DFID works to improve further developing countries’ resource stewardship by contributing to the work of the Global Forum on Tax Transparency and the OECD Tax and Development Task Force. These are leading efforts on behalf of the G20 to implement international standards for tax transparency and exchange of information to enable tax authorities across the world to access the information they need for ensuring they are able to the tax revenues they are due. Significant progress has been made in the last two years. More than 500 agreements on tax information exchange have been signed between financial centres.
So to conclude, I hope these actions demonstrate this Government’s commitment to increasing the attention and resources to the fight against corruption. Over the last year, we have reviewed how DFID can improve its approaches to managing the risks of corruption in DFID’s programming, and to tackling corruption more broadly in DFID’s partner countries. As a result:
- We are now preparing comprehensive anti-corruption strategies for all DFID priority countries which set out how we will assess, respond and implement action to address corruption and ensure the effectiveness of UK assistance. We have undertaken to produce strategies in respect of all 28 of DFID’s partner countries by the end of January 2013.
- We are increasing our vigilance and efforts so that we better identify, track and recover losses, wherever they arise.
- We are ensuring that our staff has better skills and knowledge and that the organisation has more capacity and capability to address corruption and fraud.
- We have appointed an Anti-Corruption Champion at Director-General level to ensure there is greater coherence, coordination and integration of anti-corruption objectives between the wider policy environment in developing countries, in DFID’s programmes, and within DFID itself.
This gives you an overview of what DFID is doing. I know you are also working to fight corruption and our combined efforts can have an impact. We can reduce the damage caused by corruption to some of the poorest countries and poorest people