Wednesday 16 May 2012

Corruption in International Law

Sam Storr

Corruption is portrayed as a deadly force in Kenya. Flickr Stream of futureatlascom, from hpronline.
Of all the forms of structural violence that beset the world, probably the most entrenched, widespread and harmful is corruption. It is a sickness, of politics or even of society, which prevents development without huge inequalities, strangles attempts at good governance, destroys confidence in aid programs, and disenfranchises entire populations. 

Of the two most widely-agreed types of corruption, it is petty corruption – the street- or low-level corruption involving interactions with public officials – that most directly impacts the poor. Petty corruption can envelop all levels of society, and is a crime in which all are complicit. Grand corruption, on the other hand, affects the incomes and governance of entire nations. 

Although a problem for all countries, it is in the developing world where corruption can be seen to do the most harm. In Nigeria, the scale of corruption surrounding the oil industry bedevils attempts to account for how much money is lost, or even how much oil has been taken from the soil. Despite the country’s huge incomes, rising poverty levels provoked huge protests last January, which may force the Nigerian government to take action. Uganda too announced a moratorium on oil deals last year after corruption allegations caused parliamentary infighting. India has seen a huge anti-corruption movement grow since 2011, and the Arab Spring can also be read as a widespread rejection of corrupt rule.

Rich mineral and petroleum deposits can quickly attract foreign investments if the country’s politicians are able to offer strong protections to industry. Yet these incomes can sustain a corrupt political elite that shows little interest in extending the same courtesies to their populations. It is argued that these nations have too little capital and expertise to exploit their riches without foreign investment, but this begs the question of what else might be lacking. The risks of conflict that many scholars of war associate with these types of state have led to natural resources being considered more a curse than a blessing.

And yet, major foreign investment deals continue to be pursued in countries rife with corruption issues. There are widespread fears that the about the finding of large oil deposits in east Africa and their impact on countries like Kenya. Even in Somalia, which barely has even a transitional government, the prime minister recently promised that there would be ‘room for everybody’ to gorge on the country’s oil resources, as long as they help to construct the country. This happy narrative of Western-led development and state-building defies the experience of Afghanistan, which is itself negotiating international investment in its resources. 

It is not that international commitment on the need to tackle corruption is lacking. Anti-corruption has been the 10th principle of the UN Global Compact since 2004, and the UN Convention on Corruption now has 140 signatories. Anti-corruption conventions have also been passed by the Organisation of American States and the African Union, and the US has had the Foreign Corrupt Practices law since 1977. Yet it is clear that far more needs to be done in enforcement terms. 

Entrenched corruption is naturally resistant to national attempts at change. As a political issue, it can even become a tool to justify the suppression of dissenters. The mass demonstrations in India that began last year, as well as the examples of Nigeria and Uganda, demonstrate that corruption can eventually reach intolerable levels, even to the point of deterring investment. But national recognition comes at a great cost, and it is yet to be seen whether firm action will actually be taken.

Although, at its worst, corruption can hark back to pre-modern forms of order, it is often inherently transnational by nature. Those who obtain large riches at the expense of their compatriots often base much of their lives abroad, travelling, doing business, educating their children. The ability to expatriate their gains, or emigrate if necessary, is essential if they are to operate with impunity. Sanctions are therefore be an invaluable tool in removing the incentives of corruption.

One major existing obstacle is a lack of data. Many attempts to measure corruption rely on proxies, such as black market size or regulation levels, and the UNDP’s advice is that it be more of an ‘art form’, taking into account many indicators, surveys, and expert advice about the country. This is the approach taken by the widely-cited Corruption Perceptions Index produced by Transparency International, which is essentially a compilation of expert assessments. Although useful for investors, this type of investigation is insufficient to identify corrupt individuals.

Targeting the organisations that thrive on such situations is an alternative to coaxing resource-holders, sustained as they are by their high incomes, to be more accountable to their own populations. Industrial lobbyists, whom can function as a more institutionalised form of corruption, are naturally putting up a good fight. Part of the problem is the assumption that payments to governments are a normal part of competitive business, and that any interference is unfair. A major concern in this respect would be China, which is taking steps to accelerate its foreign direct investment while making a virtue of its ‘non interference’ approach.

However, recent developments suggest that developed nations are increasingly recognisant that the costs of allowing corruption may outweigh the advantages of letting it slide. The US passed Section 1504 of the Dodd-Frank act in 2010, requiring US-registered companies to register all their transactions with governments, and the European Commission followed with similar legislation in 2011. The Foreign Corrupt Practices Act, which has a wide mandate against all activities that can be linked to the US, is also said to have entered a ‘new era of enforcement’. 

Another approach is to put corruption on the human rights agenda. The International Council on Human rights makes the case that corruption can violate the rights to non-discrimination, fair judicial processes, political participation, information access, economic and cultural entitlements, food, housing, healthcare, education and water. Yet despite a growing recognition of the harms of corruption, the status quo remains resilient to both international legislation and national movements.

No comments:

Post a Comment