The G20’s effort to tackle the global problem of corruption, arguably one of the group’s least anticipated and most unsung success stories, builds on work started by the G8 and other entities. The G20’s anti-corruption efforts, linked to the increased accountability, credibility and transparency of the global financial system, have led to deeper institutional engagement and laid the grounds for further progress.
At the 2008 G8 summit in Toyako, Japan, member countries endorsed an Accountability Report that detailed actions taken by G8 members in response to their anti-corruption commitments. Several G8 members came under fire from groups such as Transparency International (TI) for falling short of their own declarations. Civil society groups pressed for a more sustained global campaign after another non-government organization, Global Witness, published a damning report showing how major banks have facilitated corrupt dealings with leading figures in resource-rich states.[i]
Against this background, several G20 countries saw an opportunity to advance a robust anti-corruption agenda for the G20. As early as 2002, G20 finance ministers expressed concerns in the wake of 9/11 regarding money laundering to finance terrorism and “other abuses” of the financial system.[ii]
When the global financial crisis broke in 2008, these concerns escalated. In its final report on March 27, 2009, the G20 Working Group on Reinforcing International Cooperation and Promoting Integrity in Financial Markets urged that “international bodies responsible for prudential and regulatory standards, anti money laundering and terrorist financing, and tax matters…accelerate their work of identifying uncooperative jurisdictions and developing a toolbox of effective countermeasures against these jurisdictions.”
G20 leaders launched a more comprehensive initiative at the Toronto summit in June 2010, with the creation of its Anti-Corruption Working Group chaired by Indonesia and France. Operating quietly and effectively, this group released an Anti-Corruption Action Plan, subsequently approved at the Seoul G20 Summit in November 2010. Key features of the plan include:
- a push for the accession and ratification of the United Nations Convention against Corruption (UNCAC) and strengthened implementation of its peer review mechanism;
- criminalization and other measures to combat bribery of foreign public officials, including a call for more active engagement by members within the Organisation for Economic Co-operation and Development (OECD) working group on bribery;
- combating of money laundering through the Financial Action Task Force;
- a cooperative framework for denial of safe havens to corrupt officials;
- cooperation for the recovery of stolen assets; and
- a proposal for a public-private partnership on anti-corruption measures.
India has recently ratified the UN convention amid signs from other G20 countries affirming that the convention is a valuable tool. Such momentum could make it easier for France to achieve one of its priorities at the coming summit — the ratification of the peer review mechanisms under both UNCAC and the OCED’s Convention on Combating Bribery.
Nonetheless, other actions are required if major corruption is to be beaten back. To give the effort teeth, the G20 should ensure that a financial intelligence unit, privileging components of the anti-corruption agenda such as the recovery of stolen assets, is made a priority under UNCAC — and gets the resources to take up the task. Another step forward, proposed by TI, would be the formation of multi-stakeholder groups in G20 countries to advance the implementation of the G20 Action Plan at the national level, borrowing an idea from successful sectoral experiences such as the Extractive Industries Transparency Initiative.
In contrast to the indifference or tepid support shown for some parts of the G20 agenda, civil society organizations have embraced the anti-corruption agenda, with 77 organizations having urged the G20 in a letter to swiftly implement the Action Plan. Civil society groups worry that the G20 may not “walk the talk” as the November summit approaches — that transparency in business dealings will be trumped by more pragmatic considerations concerning national competitiveness.
Business reactions have, so far, been relatively circumspect. One way of engaging the business community is through the “B20” summit (a meeting between G20 finance ministers and business leaders from G20 countries) and its dialogue with G20 leaders, a feature now embedded in the summit preparation process. At a conference of business leaders in April, OECD Secretary-General José Ángel Gurría proposed that the coming B20 summit would be a means for moving forward on the anti-corruption issue: “A business pledge would be a great vehicle for such commitments and could be presented to the G20 Leaders in Cannes” (Gurría , 2011).
Diplomatically, the anti-corruption initiative shows how concerted political will from diverse sources within the G20 can amplify movement towards an objective, moving it closer to success. President Sarkozy has made progress on the issue a priority for his G20 presidency. As in all the G20’s policy work, however, advances can be guaranteed only by collective ownership being shared between the traditional G8 countries and pivotal states from the Global South. In this case, the vital ingredient has been the championing of the initiative by Indonesia, a country that ranks 110 out of 178 countries in TI’s 2010 Corruption Perception Index. Yet, rather than avoidance, Indonesian officials have recognized the value of the G20 as a lever for problem solving. As the Indonesian G20 Sherpa Mahendra Siregar cogently stated, “The war against corruption will not succeed without good global cooperation” (quoted in Fadillah 2010).
This point was underscored by recent, highly visible episodes of corruption that have come to light in connection with the Arab Spring. Maintaining momentum on anti-corruption could not be more timely.